Drain your swamp of information overload

Tuesday, June 6, 2017|Investing for the Long Run|
  • Drain Your Swamp Of Information Overload

Situation

Too many investors are drowning in investment information overload.

Symptom

Investors face over 75 new data releases in the month of June, just for the US.

Solution

Learn ways to ignore the deluge of latest facts, figures, research and conflicted advice.

Summary

Savvy investors are simply astonished at how much information they don’t require.

“In your thirst for knowledge, be sure not to drown in all the information.”
—Anthony J. D’Angelo, in his publication ‘The College Blue Book’

The investing information highway never sleeps. It’s available in loads of flavours and from a multitude of sources every moment of each day. You can carry practically all of it on your phone and other handheld technology.

Accordingly, I suggest that every investor reflect on two questions:

  • Are you feeling overwhelmed sorting through the heaps of daily investment information?
  • Do you find it hard to ignore the continuous stream of facts and figures at your fingertips?

Many investors have difficulty separating relevant particulars from constant noise. The belief is that the abundance of information improves decision making. In reality, plenty of investors get swamped in the vast data thundering their way. Some drown as the information flood gates open. All in the quest to stay ahead of the curve and improve the precious portfolios.

I checked the June 2017 calendar of US economic data releases. I counted more than 75 key releases for Wall Street alone!

Perspective helps
I know all too well about the need not to be swamped or drowned by the onslaught of copious daily information. It’s so easy to suddenly find yourself devouring an insatiable appetite of investing data. On the flip side, it’s hard to stop the addictions once you acquire the nasty habits. Perspective helps make sense of the scope surrounding your overload.

I checked the calendar of US economic data releases for June 2017. I counted more than 75 key releases for Wall Street alone! The releases, such as jobs, GDP, retail sales, trade figures and others are just the most visible, vying for investor attention. There are plenty more for investors who are keenly interested. That is a mountain of fresh US data for anyone to make sense of and process. Then there is also the slew of data for Europe, China, Japan, India and others.

Let’s assume that you keep tabs on 10 to 20 of the key releases mentioned above. That is still a tall order to fill, month after month, after month. Say you are a follower of only one monthly release, that being the US jobs report released last Friday. My question to you is what did you do with the information? How did the shortfall in jobs expectations impact your portfolio strategy? What about the downward revisions that were made to the previous two months? It does not seem to be an easy task to interpret on an ongoing basis.

I fully empathize with overloaded, frustrated investors swamped or drowned in such information. Even professionals trained to separate useful facts from daily noise can have trouble keeping up with all the juggling. I highly recommend reducing your desires to be on top of all the market and economics minutia. Following your comfortable investing strategy should not require frequent tweaks.

Slimming tips
I can easily arrange for volumes of data to be sent my way every day. However, I have no plans of drowning in the clutter and muddle of information. Perhaps, it’s also time to start slimming down your appetite for all that information. Without worrying or being concerned that you’ll miss out on something important.

Your most effective and useful solution is to drain the information swamp. Learn how to screen what’s relevant and what you can ignore. I expect it to take a while and perhaps, a few tries. The easy out is to simply continue receiving the overload. However, it’s much more refreshing to get used to less stuff at your fingertips.

My five filters help put your information channels on the slimming path:

  • Develop confidence in your chosen approach before implementing the details.
  • Keep making sensible, logical decisions without emotional attachments.
  • Follow your comfortable, well-reasoned investment strategies for the longer run.
  • Continue to explore where you envision your portfolio to be in ten or more years.
  • Find your nerve to ignore the onslaught of data, research, predictions and conflicted advice.

Each filter reduces your need to know and react to the deluge of details. After a while, you may want to follow only a few select data points. The rest of it simply does not matter. Hence, my best advice is for you to ease up and take an information breather.

Being plugged in daily to everything does not guarantee anything, particularly superior portfolio results. You will be absolutely amazed at how much information you do not need. Nor is it imperative to continuing your course of action.

Filters that keep the information overload in check are my medicine of choice. Let’s proceed with confidence to draining your information swamp. It works for me.

About Adrian Mastracci, Discretionary Portfolio Manager, B.E.E., MBA  My expertise in the investment and financial advisory profession began in 1972. I graduated with the Bachelor of Electrical Engineering from General Motors Institute in 1971. I then attended the University of British Columbia, graduating with the MBA in 1972. I have attained the “Discretionary Portfolio Manager” professional designation. I am committed to offering clients the highest standard of personal service by providing prompt, courteous and professional attention. My advice is objective, unbiased and without conflicts of interest. I’m part of a team that delivers comprehensive services and best value in managing client wealth.