 The song by British punk rock band The Clash summarises the questions that we all have when any investment starts displaying volatility. For a quick summary, the news headlines:  If you are confused by these, join the que. It appears that on the 4th of March 2025 while the US president was devising a plan to kybosh world markets with tariffs, our opposition leader was looking at ways to curb the post-pandemic work from home trend. On the 5th however, most leading economists and business leaders appeared confident that Trump has a plan – crisis averted. The Australian Super CEO indicated that they would support more building in Australia – good signs all around? Then we have Cyclone Alfred on the 10th which likely means insurance premiums will be up. Hey, will that mean the insurance companies listed on the exchange will remain profitable? I suppose? Large Super funds are mulling when to stop buying more shares. Well, if they don’t stop then where is the problem and prices should remain in a tight trading range-- And then today, the opposite. Large super funds buying US shares are in trouble. Meanwhile the Star Casino has a potential buyer – so once the insurance payouts start rolling out post Alfred, guess where some of that will be spent? All the above is what is defined as market noise. If we fail to understand the fundamentals of what we are investing in we will continuously ride this emotional wave: straight to a heart attack. Tuning out the market noise is hard. Every media journalist is suddenly an expert on inflation, tariffs, and total market anarchy – all while presenting the next 7-day forecast – incorrectly. Ask yourself why you invested in the first place. Anchor yourself not to the ticking of your balance but to the plan that you’ve set to fund an easier retirement. Most likely none of the variables have changed. Remind yourself what you are invested in and how you feel about the largest 1700+ companies you are invested across; companies whose products you likely use daily. Will you stop buying them? If the market drops by 5%, will I no longer buy bread and toilet paper? Unlikely – under stress, you are more likely to increase the share value of Endeavour group – think Dan Murphy’s and BWS. I certainly am parched writing this article. Sleep on it. If you avoid a knee jerk reaction by delaying, then you may just find that by the end of the week some new worry will consume the world. If you can’t sleep on it, change it. At times the sounds around us are just overwhelming. This is fine. If staying the course is just too nerve racking, then it may be time to review your tolerance for volatility and look at changing to a more defensive investment outlook. There is no right and wrong in investing. It is about understanding and being comfortable with your decisions. Any advice provided in this article is general advice only and has been prepared without taking account of your personal objectives, financial situation or needs. Before acting on any such general advice, you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs.
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