Investors are continuously bombarded with information that activates two of our most basic human emotions: fear and greed.  The overwhelming majority of this information is “noise,” which has no effect on our long-term financial well-being.  The more completely we tune it out, the better off we will be.

Noise comes in many forms: news headlines that make us feel scared about the market; an “expert” forecast about the short-term prospects for a stock or asset class; our knowledgeable friend convincing us of the merits of a promising start-up or real estate deal.

These all prey on our natural tendencies toward fear and greed, and challenge our commitment to the thoughtfully-developed investment plans we established to meet our specific goals.  Those without plans are even more vulnerable.

Ignoring this noise is simple in theory, but difficult in practice.  Distinguishing between noise and relevant information can be difficult, especially when our pesky emotions get in the way.

The best strategy is to work with an advisor who knows how to spot noise and understands the emotional response that comes with it.  Having a trusted advisor – who understands the plan in place and the reasoning behind it – allows an investor to better filter and react to this constant flow of information.