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Reduce Your Investing Noise Level

Posted By Barry Ritholtz On November 3, 2013 @ 10:00 am In Apprenticed Investor | Comments Disabled




My Sunday Washington Post Business Section column is out. This morning, we look at “noise” levels, and what you can do to reduce them.

Here’s an excerpt from the column, that asks: Do these inputs add to signal or to noise?

News: Most of it is actually old. By the time information hits the papers, it’s pretty much already in the stock price.

• TMI: Too much information can lead to the paradox of overconfidence and bad investment decisions.

• Anecdotes: A good narrative is more compelling than statistical data, but the data are more determinative of future returns.

• Talking heads: Your goal is to safely grow your assets — but what are the goals of those you see on TV? What’s their agenda?

• Short-term goals: How much of your information consumption is short-term, meaningless noise?”

I also expand on our earlier post [2] of looking at what it would be like if we purposefully tried to get more noise in our daily media diet.


Reduce the noise levels in your investment process [3]
Barry Ritholtz
Washington Post, November 32013 

Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2013/11/reduce-your-investing-noise-level/

URLs in this post:

[1] Image: http://www.washingtonpost.com/barry-ritholtz/2011/03/31/AFWBwIBC_viewAll.html

[2] earlier post: http://www.ritholtz.com/blog/2013/10/more-noise-less-signal/

[3] Reduce the noise levels in your investment process: http://www.washingtonpost.com/business/reduce-the-noise-levels-in-your-investment-process/2013/10/31/69441cc0-3e93-11e3-b6a9-da62c264f40e_story.html

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