By Tim Courtney, Chief Investment Officer
The media is having no trouble filling up time slots or columns with economic and market news items this week. They have their pick of the government shutdown,1 China tariffs,2 AI spending and impact,3 Federal Reserve rate cuts and recession concerns,4 among many others.
None of us know how these events will ultimately be resolved. Most of the news we see contains no actionable information at all for investors. When there is actionable information in news, market traders incorporate that information into prices extremely quickly – typically before you and I are even informed of it – so that any trades made will be at prices set by participants that are already aware of the information.5 Because of this, from the standpoint of a disciplined investor, this news is heard as just noise or as a tempest in a teapot.
Still, though a disciplined investor may decline to take action based on the news they see, they may take action based on prices that have changed. They could sell a position now that it has risen in price to free up cash they will need next year, or to rebalance their portfolio since asset prices in the portfolio may have moved in different directions. Stock, bond, or fund managers may decide to re-weight investment positions or sectors based on new market prices. These actions are based on price movements more so than the news that may, or may not, have caused them.
The future is still unknowable, and most of it is out of our immediate control or influence. However, we can know prices and make decisions based on our circumstances. This brings to mind the well-known serenity prayer, which asks for wisdom in discerning which outcomes we can influence.6 We believe investors should also be discerning and focus on what they can control. If you have any questions, please contact your Exencial advisor.
Sources
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