We live in a society where we are taught to crave and savor information. The problem is we are bombarded with too much information. While many of us try to keep up on the latest financial news, the most financially successful people have a completely different relationship with information.
What you need to make the best financial decisions is not the latest news. You need the best financial insight.
All News is Old News
We have been conditioned by years of watching cable news to perk up whenever there is breaking news. Both the internet and television are optimized to grab our attention with bright banners and flashing alerts. It’s almost impossible not to tune in to see what the breaking news alert is about.
In the financial world, by the time you are hear something on the news, that event has already begun to be factored into the market. All news is old news. Additionally, if you analyze cable TV broadcasts, you will notice that there is little correlation between breaking news events and valuable information.
Breaking news doesn’t often factor in the relevance or importance of an event or piece of information, just its recency.
The news is great for stirring up your emotions, but it is a poor source of financial information.
Difference Between Data and Insight
Almost everything that is reported in newspapers, blogs, and on cable news is data. You learn a lot of discrete information. However, data on its own is useless. We all have access to far more data about everything than we can possibly ever synthesize.
If you want to make better financial decisions, you don’t need more data. You need more insight.
Insight is a process of discovery. Experts filter out the useful data and analyze it. The data is processed into meaningful information about trends and potential opportunities. While all news is by definition focused on something that has already happened, insight is about what may happen in the future.
Insight helps you make better decisions for the future.
Making Decisions Based on Patterns and Trends
Because of the volume of information available to us, every piece of news or data is useless without context. As humans, we cannot process all of the financial data we have access to without some type of filter and framework to help make sense of it all.
The real job of your wealth manager is to help you discover the insights you need to make the best financial decisions for both the short-term and the long-term.
Their insights are based on synthesizing data to spot patterns and trends. If you can spot a trend or pattern before most of the rest of the market, you have a strong competitive advantage.
While not every potential trend or possible pattern will be a financial boon for you, your capital will be safer and grow faster when making decisions based on data-based insights than it will reacting to news events that you hear without the full context.
When it comes to your financial future, you should bet on financial insight instead of maximizing your news intake.