Drown out the White Noise and Smile

This is what most financial talk shows should look like.

This is what most financial talk shows should look like.

In my 401K, I currently have a mutual fund that invests in and tracks all of the companies in the S&P 500 (hereafter referred to as just the S&P).  For those of you unaware, the S&P is a stock market index is based on the market movements of the 500 large companies contained in it.  These include behemoths such as Amazon, American Express and Coca Cola.  It’s also fodder for talk radio and TV.  If you listen to the stock updates on the radio or watch it on CNBC, they will always report on the results of the S&P.  And herein lies the problem.

Whether I’m driving home from work or to the supermarket, every so often the news will report on the goings on of the stock market.  “The Dow was up 120 points because of new consumer spending numbers.”  “The S&P was down 20 points because of the latest unemployment numbers.”  Or my favorite, “The market is in complete flux today because the Fed chairman sneezed 3 times in a row.”  For something so essential to the world’s economy, the US stock market is a very sensitive thing.  I always try to keep an ear for the S&P numbers because I’m directly invested in it.  But I shouldn’t.  Because I know that short term fluctuations have no real bearing on a retirement account.  That’s considered “white noise” and it can be hazardous to your finances and to your sanity to continue to listen to it.

Wikipedia defines white noise as “a random signal with a flat (constant) spectral density.”  That sounds too physics-y to me so I will provide an alternate definition.  White noise is that stuff you hear that doesn’t really effect you but you can’t help but listen to.  When you sit in a coffee shop to read a good book but are transfixed by the conversation behind you about someone’s latest medical issues, that’s paying attention to white noise.  Having a conversation with your friend but paying attention to the crazy man on his cell phone, that’s paying attention to the white noise.  And watching shows on CNBC to hear the latest stock trends from the latest talking (screaming?) heads is paying attention to the white noise.  It’s easy to do and seems fun at the moment, but it does nothing for you in the long run.

CNBC and Fox Business have empires to run.  They have people to pay and need lots of money to pay them with.  They need something to fill the airwaves with.  This is why there is an endless stream of talk shows and stock analysts telling you to do something different with your investments.  The best thing you can do is to NOT listen to them.  Investing is like a marathon.  It involves a lot of diligent work over a long period of time.  Trying to speed up the process with a hot new tip will only hurt your long term results and can be harmful to your health.  There is a great post about how much more happier and successful you would be by following a low information diet.  I couldn’t agree more with this premise, because if we humans are given more choices, we agonize over it and sometimes rush to the wrong decision.

There is usually one right choice when it comes to investing for most people.  And that is to set it and forget it.  It requires some diligent work and soul searching up front, but once you decide on how you want to invest, the battle is already won.  Remember to focus on what you can control, your contributions and fees.  You can’t control the market’s ups and downs.  Some think they can predict it, but they’re usually wrong.  Just check back on your investments every year and so and make any adjustments as needed.  Repeat the following year.  That’s all there is to it.

Drowning out the white noise does not mean that you should get complacent.  We should always be looking to expand our knowledge and broaden our horizons.  This can be done by reading well written financial blogs and magazines and classic books that have lasted the test of time.  You can obviously start with this humble blog, but a quick Google search will lead you to many great financial resources out there.  That won’t try to sell you stuff.  And that won’t make you feel like you’re missing out on something big.  So don’t pay attention to all the financial fluff.  Stick to your long term goals and values and keep trying to improve on what you know.



  1. “The market is in complete flux today because the Fed chairman sneezed 3 times in a row.”

    Haha – this is absolutely the case! With the increase in real-time information, news and analysis, everyone tries to find a reason for everything. So many reasons for why the market fell 0.2% today. Well…because it did!

    • Syed says

      Yeah exactly. It’s kind of like lemmings jumping off a cliff together at the slightest scare.

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