Blocking Out ‘The Noise’

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Woman closing her eyes putting her fingers in her ears

I’ve said on this blog many times that the basic principles of FIRE are very simple.

You reduce unnecessary expenditure, pay down bad debt, build an emergency fund and invest the rest across a diversified portfolio.

There’s a little more to it than that, but break it down to its barest bones and you can’t go too far wrong following those four steps.

But there’s a marketing media machine rolling like a thunderstorm across news outlets and online platforms, with the sole intention of parting you with your money even when you’re trying make positive steps by letting your money work for you in the financial markets.

Even if you manage to avoid the rampant consumer advertising and lifestyle comparisons that are rife on social media, this sort of useless noise is also rife in the investment world.

Daily news stories of the next hot stock or analysis of the economic outlook are just wild guesses at best.

Investment news outlets also show the daily/ hourly/ minutely swings of the various indexes with great big green or red arrows to show how dramatic that 0.1% drop of the FTSE100 is.

Red arrow showing downward trend
“Oh no, not the dreaded red arrow, how will we cope?!”

I should admit, I do look at the market data page on the BBC most days, but more as an educational tool while I’m still in my first few years of investing. But I’m always conscious of not letting the result of these daily changes impact my long-term decision making. It’s only one day out of the hundreds and thousands that will come before I eventually sell or draw down my investments.

All this noise is a mere marketing ploy designed to generate some sort of shock factor or to obtain more clicks on the click-bait ridden articles.

To someone on the path to FIRE these graphics and news headlines should be of little to zero concern.

Not only do you get this in mainstream media outlets, but these sort of tactics are even used in the actual naming of funds.

Advanced Growth AlphaScience Sustainability Plus – Income/ Accumulation. This isn’t an actual fund, but I’ve seen similar being offered. It’s absolutely meaningless and just makes it seem more complicated than it actually is.

Have a go at this hedge fund name generator and see how ridiculous a name you can make. But I bet the majority don’t sound too dissimilar to those active funds and hedge fund companies you may have come across before. It shows how arbitrary these sorts of things can be.

Looking into the underlying shares of these funds usually reveals that they’re not much different than any other.

I’ve had my eye turned many times by an interesting looking ‘eco-fund’ with a fancy name, to end up discovering it invests in the same tech companies I’m already invested in, in another fund.

Your idea of sustainability might be completely different to that of the fund manager’s. Just because the title of that fund states ‘Eco’ or ‘Sustainable’ or ‘Renewable’, doesn’t mean those expectations are met with the underlying asset allocation.

Blocking out these fancy names and loud headlines can be an even greater asset to an investor than any advisor or YouTube Investment Guru.

You have to be aware that, at every stage of your journey, there will be someone looking to part you with your money, either in the form of extortionate fees or redundant advice.

This sort of ‘in your face’ advertising is ever-present on platforms such as YouTube. I watch a lot of money based videos from content creators, and am constantly targeted with ads showing someone claiming to have insider knowledge which they’ll reveal to me if I sign up their course.

This is bullshit. If they really had such an insight, why would they waste their time teaching and constructing courses? Why wouldn’t they just invest their life savings and make a fortune? Why do they need to continue to make money from their courses if they’re already so successful?

FIRE by design is boring and that’s a good thing! Once the process becomes boring, you know you’ve optimised it to the point where your financial behaviour has become automatic and you don’t really have to think about it.

This is when you can become distracted and start to look at other opportunities. If you really can’t help yourself, introduce a small portion to some more ‘fun’ and experimental satellite investments that have no connection to your main investment portfolio.

Core and satellite investing digram
Take some risks, but try to separate one from the other

It’s why I have my Freetrade Portfolio. I can take a little more risk and get all my mistakes out my system while maintaining my main focus of long-term, passive investing.

I also manage my own internal noise by ignoring the value of my investments, and only concern myself with my own actual contributions.

If I don’t need that money for another 20+ years I don’t feel the need to concern myself with the monthly value of my investment portfolio when I’m such a long way off ever using that money, and such a staunch believer that holding for the long-term will ride out any dips.

Looking at the monthly ups and downs, for me, will only lead to worry and stress that will serve my long-term goals no purpose.

It’s also why I don’t have a FIRE number. It’s such a long way off, I can’t even consider it, especially when I don’t even have my own place yet.

When I’m nearer the time, looking to start winding down and have myself settled in one place, of course, all these things need to be considered. But just 2 years into my investment journey, it’s just one more thing I don’t need to think about; it’s one more bit of noise I can afford to block out at the moment.

My main priority right now should be how I am allocating my investments and making sure I’m regularly contributing no matter the state of the wider market/s.

There’s a lot of noise out there. Usually the most dangerous are also the loudest and most frequent.

If you can fend off the the unwanted noise, stick to your reliable sources and stay focused on YOUR goal, and not the goal of the marketing managers of the investment companies, you’ll reach your well deserved goal.

4 thoughts on “Blocking Out ‘The Noise’

  1. Am very much with you on the Core vs Satellite – I enjoy playing around with my ‘fun’ investments but my core investments are boring and best kept that way! Might call my fun portfolio ‘Winter Rock Associates Fund’, which is the hedge fund name I rolled, haha!

    Hear what you’re saying about not even tracking your investments monthly when you’ve got such a long investment horizon ahead of you. I decided to put myself through the monthly updates as they serve as motivation (to me) to keep on the path. It probably wasn’t a good idea right at the very start as it seemed as if I was going nowhere fast, but after so many years, it’s been worth it, just to see my own progress.

    Liked by 1 person

    1. Winter Rock…Ooo nice! Makes you sound like you have a cool, hip office in a snowy northern town in the US or Canada. Investment tycoon by morning, ski expert in the afternoon.

      Yeah I’ll definitely start to at some point a few more years down the line. Focusing more on my contributions at the early stage has definitely helped my headspace get over the ups and downs and not panic. It also means that part of my net worth calculations each month always go up haha! If I was more qualified I think they’d call it ‘creative accounting’.

      Liked by 1 person

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