Investment Commentators & Timeframes

Realise this one fact, to stop yourself making investment mistakes

As a personal finance enthusiast/geek/saddo, I find myself drawn to interviews, mostly on YouTube, about economics, finance, bonds, government debt and the myriad of other subjects that the financial press discusses.

It occurred to me, that although interesting, I never take action as a result.  One of the main reasons recently crystallised in my mind.  I also had a realisation that if the average investor realised just this one point, it would save them from paying fees and missing out on market moves by buying or selling needlessly.

What is the reason?  Timeframe of interest difference.

Although interesting and to some extent informative, I realised that without knowing what timeframe commentators are working to, taking action based on what these often extremely capable, well informed and intelligent people are discussing, is a dangerous game.  Some are fund managers (timeframe of interest = weeks/months), reporting to demanding investors and company bosses.  Some are traders (timeframe of interest = days), using complex financial instruments to profit from market movements on a daily basis, and some industry professionals (timeframe of interest = days/weeks/months) who have been invited to an interview, enjoy the publicity and have to think up something sensible to say.

If you’re a retail investor (timeframe of interest = >10 years), this is all irrelevant.

Listen to what they say by all means.  Educate and inform yourself if that’s what you enjoy doing.  But don’t divert from what should be a well established routine of pound/dollar/euro/etc cost average into investments and not stopping.

Note of interest:

If you want to watch something more detailed than the sensationalist or brief commentary found on mainstream news, David Lin on Kitco News is fantastic.  Asks good questions, doesn’t push an agenda and lets the guest say what they came to say.  Check him out on YouTube.