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Behavioural Gap - Noise And Wisdom

“If you don’t read the newspaper, you’re uninformed. If you do read it, you’re misinformed.” — Denzel Washington.

Image Credit: Behavior Gap

This has never been truer when it comes to making financial decisions based on current news and events. Most news is noise designed to grab attention and make you feel a certain way. A much smaller part of that news may be useful information, but will have little relevance to your personal goals and circumstances. News that is relevant to you in practice is extremely rare and amongst all the noise that is out there, likely to be a part of the news you missed.  


It is easy to understand why we are emotionally affected by the news when it comes to finance and investments, when we see headlines with terms like “$x billion/trillion wiped off financial markets” or words like “Armageddon” “Crash” “Plummet” or “Doom”. 


But making emotional financial decisions based on how the news has made you feel regarding your investments or financial life is a recipe for disaster. 


Instead of acting emotionally and potentially making decisions that will adversely impact you in the long term, an adviser can assist you to make objective, rational, evidence-based decisions, while helping you to develop and maintain the discipline that is required to invest successfully over the long term. 


A financial adviser helps you to block out the noise and channel the information that is useful for you to know and understand. This will allow you block out all the useless noise and information and instead focus on what is needed to work towards your financial goals.  


Research by Russell Investments in their 2021 report “Value of a Financial Adviser” indicates that this can equate to up to a 3.95% p.a difference in returns. 


Your adviser has the added benefit of context and a personl relationship with you where your situation and goals are well defined and understood. 

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If you’d like to discuss your current situation or have any questions please contact us.

The information contained within this website does not consider your personal circumstances and is of a general nature only. You should not act on it without first obtaining professional financial advice specific to your circumstances. Before purchasing any financial product, always consider the relevant Product Disclosure Statement (if applicable) which provides full details of risks, terms and conditions.

Some details (including names) have been modified for privacy purposes and assumptions have been applied regarding future interest rates, investment returns, the client’s circumstances and other financial and economic variables for illustrative purposes – actual outcomes may vary.

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