This post was originally shared in my DT Email Newsletter here.
I’m kidding.
You can never eliminate market noise. Unless we put a huge box over our head and don’t step out of the house.
In recent months, headline news from the Iran conflict keeps changing many times a day. And that’s a big reason why stocks have been bouncing up and down.
Somewhere in the middle of all that, I found myself thinking about the most common piece of advice gurus and advisors love to give:
“Just ignore the market noise.”
Yes, they are right. Telling people to ignore market noise is well-meaning advice. It’s like motivational speakers telling you to STAY POSITIVE.
The problem is it’s incredibly hard to ignore market noise. When your stock portfolio goes into red, you get that uneasy churning in your stomach. I admit, I get that too.
It’s our body’s fight or flight instinct kicking in. So doing nothing can feel unnatural and that’s why people panic sell.
Today, it’s even worse when market noise follows us everywhere – social media posts, YouTube, news alerts from apps and so on. So I’m going to give you the greatest secret in today’s email…
Market noise is never going away.
And I’m ok with that.
Sure, take the good advice from gurus and advisors to just “ignore the market noise.”
But the better advice is this: Have perspective.
Think about this. Dinosaurs have lived for over 165 million years on earth. Humans have only existed for around 300,000 years.
And me?
I’m turning 39 this year. My third boy is coming out really soon. And if life goes well, I might still have another 40 to 50 more trips around the Sun.
Now compare that timeline to today’s news. The Iranian war has just started not too long ago. Headline news keeps changing between good and bad news. And stocks are down into correction territory. It sounds scary.
But just so you know, Warren Buffett had no idea his multi-billion dollar investment fund would have crashed over 30% a few times.
The worst was during the 2007-2009 global financial crisis. As I’ve shared with Diligence Wealth Club members yesterday on my live portfolio updates…
Come to think of it, I’m sure Warren Buffett must have felt like a punch in his guts at times too.
Yet Berkshire Hathaway continues to thrive through market cycles – the inflation shock in the 1970s, Black Monday, the dot-com bubble, the global financial crisis and so on.
Have perspective.
Once we accept the market noise is never going away. Once we accept our stomach will still churn when the stock market gets bashed down, the next thing we need to do becomes much clearer:
We focus on accumulating high-quality dividend stocks for our portfolios.
This way, even with all the market noise, you’d still be paid dividends…
Simply put, whether oil prices keep rising, or guessing how long the war would last, solid businesses that are still the top dog in their own industries still have their durable competitive advantage, sustainable earnings power and a strong financial position.
They command a good return on investments. And ultimately, reward shareholders with ever rising dividends and a higher share price.
As far as market noise is concerned, what feels terrifying in that moment often looks much smaller in hindsight. Trust me, once we focus on buying a basket of solid, dividend growers, market noise becomes a distraction.
Also, I love to share some of my favourite articles for March:
- Would I Sell OCBC Shares At All Time Peak After Special Dividends?
- 5 Things You Need to Know About The Recent UI Boustead REIT IPO
- Why this Dividend Stock is the Best Performer of All Time
- Would I Buy Starhub Ltd at 6.1% Dividend Yield Today?
- 5 Things You Should Know About Lendlease Global Commercial REIT
Sometimes, investing can be simple.
Willie Keng, CFA
Founder, Dividend Titan
