April 4, 2016

Let’s Play “Guess Who Said It?”

Written by Andrew Hunt

Let’s play a spring-time game. Here are three statements from the financial press. Where do you think each one came from?

A recent quarter-end headline: “Epic collapse and recovery: Stocks’ 1st quarter”

An excerpt from another quarter-end recap: “[President and CEO of Radius Health Bob] Ward said while millions of patients are suffering from osteoporosis, a full two-thirds of them are never diagnosed or treated for the disease. That’s what makes Radius’ drugs so exciting.”

An excerpt from a June 2015 blog post: “Financial journalism is in the change business: focusing on whatever has just changed, and focusing most intently on whatever has just changed the most and the fastest. … As a result, being an intelligent consumer of financial news is harder than it sounds.”

If you correctly guessed, in order, USA Today, Jim Cramer’s “Mad Money,” and The Wall Street Journal’s“Intelligent Investor” Jason Zweig, give yourself a gold star. Heck, give yourself three. Even if you didn’t know the exact sources, enjoy a solid pat on the back if you realized how silly the first two seemed, compared to Zweig’s excellent observations. (And please read Zweig’s entire post, “Consuming Financial News Without Being Consumed By It.” It’s a gem.)

Speaking of fleeting news versus timeless truisms, let’s consider your current quarterly report. If you’ve heeded our advice to remain globally diversified in low-cost investments structured to reflect your personal goals and risk tolerances, then you’ll probably find that your year-to-date returns are in the solid range of “not bad.”

That’s great, because that’s part of your long-term plan. Still, we understand if you might be wondering whether you could be doing better. It’s hard to remain focused when the most irritating elements in the financial press never stop nipping at our heels, worrying our resolve and feeding on our self-doubts.

So let’s take a moment to reinforce our ongoing position: Invest for the long-term. Capture available market returns within your risk tolerances and according to the best available evidence. Aggressively manage the factors we can expect to control and disregard the ones that we cannot.

These principles guide the actions we’ve advised all along. We will continue to embrace them unless compelling evidence were ever to inform us otherwise. They are the ones that serve your highest financial interests, which is our highest priority.

Recently, Dimensional Fund Advisors released a helpful video that features like-minded advisors sharing insights similar to our own. For additional ideas, we encourage you to view, “Is Now A Good Time To Be in the Market?