Don't Be Fooled By Stock Market Noise

  • The volume of market and economic information is increasing exponentially, but the amount of useful information certainly isn’t.
  • Most of it is just noise, and the noise is increasing faster than the signal; hence, the higher the noise-to-signal ratio.
  • The “signal” is the truth and needs to be taken seriously; the “noise” is what distracts us from the truth and needs to be ignored.
  • This is why the higher the noise-to-signal ratio, the more difficult it becomes to make intelligent investment decisions.
  • Investors must use “filters” to separate the signal from the noise – this will improve their decision-making and investment performance.


Go to top