The financial media recently has been consumed by the issue of ultra-fast computer-driven trading and what it might mean for ordinary investors. Those with faster broadband; more powerful computers and quicker access to information have been given an advantage, it is feared. But arguably, what does the most harm to people are their own responses to high frequency news.
The growth of 24/7 business news channels and, more recently, financial blogs, Twitter feeds and a myriad of social media outlets has left many people feeling overwhelmed by the volume of information coming at them. The frequent consequence of the constant chatter across mainstream and social media is that investors feel distracted and unanchored. They drift on tides of opinions and factoids and forecasts that seem to offer no single direction.
The upshot is they end up second guessing themselves and backing away from the resolutions they made in less distracted times under professional guidance. Consultations with advisors can steer them back on track for a little while, but soon enough, like binge eaters raiding the fridge, they’re quietly turning on CNBC and opening up Twitter to sneak a peek at what’s happening on the markets.
Those who turn off the financial media,even for a little while, often find they feel more focused and less distracted. Any changes they make to their investments are then based on their own life circumstances and risk appetites, not on the blitzkrieg of noise coming at them minute to minute via media outlets.
Ultimately, going on a news diet can be about challenging our patterns of consumption and thinking more intently and less reactively about our decisions. We can still take an interest in the world, of course, but at our own pace and according to our own requirements, not based on the speed of the information coming at us from dozens of gadgets.
The American political scientist and economist Herbert Simon once said “a wealth of information creates a poverty of attention”. So it follows that if you economise on your information diet, you can maximise your attention.