News - A Helpful Guide To The Investor?
It is extremely funny to read stock market news. These days there is almost no useful news at all when it comes to investing. Makes me wonder why I still follow financial and business news. I will take up the case with a few articles that all arrived in my news feed on the same day plus some.
Does specific data from the past help?
Lets take this article titled "Investor wealth rises 9 times over past 10 years in Motilal Oswal Nasdaq ETF". Alright some fund gave a return of 24% annualized for the past 10 years. How is that going to help me today? That news would have been most useful if it was published some 10 years ago. Most news is hindsight biased. Pointless article for me and I skip.
How about some predictions for the future?
There are predictions that emerging markets will do well in the future. More specifically Sensex is expected to touch 100K in 2025! Don't believe me? Then read the following news articles which were all published fairly recently
- Sensex @100K by 2025?
- Sensex may breach 100k in 5 years as reforms take hold
- Sensex at 1,00,000! When and how?
Now we all know how the past predictions turned out, don't we? As an example, there was a prediction in 2011 that Sensex will touch 70K by 2020. That did not happen. So what is the point of reading articles that predict future?
Contrary views aplenty
As if the future predictions weren't enough, we have experts predicting exact opposite outcomes for future. For example take the case of Rakesh Jhunjhunwala says buy commodity stocks, Saurabh Mukherjea says don't. Just the title of the article is enough to make me skip it. The dissonance continues in other areas as well. Some expert say market is too high, while others say there is more to come. What shall we do my fellow investor?
Do nothing. Stick to your plan.
Like I always say, there is nothing to do. I already explained what you can do when Sensex fell 30% last year around this time. Same thing applies when the Sensex is up. Just stick to your plan. Just continue investing if you are still earning. Rebalance your portfolio according to your intended allocation. If you like to take risk and know what you are doing, make some tactical calls to maximize returns. The only sensible article that came in this regard happens to be "The long journey towards becoming a good investor". Think. Be Patient. And have the capacity to suffer. Because the journey is long.
It is quite funny but not uncommon that so many contradictory articles all arrived on the same day in my news feed. I don't know what lies in the future. But I have a bad feeling about it. So it is always better to have a plan than no plan at all. Interestingly, Indian government has slashed interest rates on several government schemes like SCSS, SSY, PPF etc which is a good sign. Meanwhile stock market keeps reaching new highs. And here I am holding the wrong kind of assets (debt) at 80% of my corpus size. Me and my silly market timing plan :).