Why Successful Investors Don’t Pay Attention to Financial News (and You Shouldn’t Either)

Has the constant negative news from social media, TV, radio, and podcasts gotten you down?

The all-too-constant noise from media, plus the echo chamber of friends and family who try to influence your financial decisions based on it, is a threat to your wealth and financial health.

Did you know: People who make decisions based on threatening news have historically been more likely to make poor investment choices?

This article explains why — and how — long-term financial success depends on tuning out media noise.

Why Bad News Sells

The financial media loves bad news. They know that people are more likely to engage with, tune in to, or click on dramatic and negative stories.

Negative headlines attract greater media attention, so the financial media prefers to deliver bad news — not necessarily educational content that supports investor success.

When people hear negative news about tariffs, taxes, rising costs, economic downturns, and more, they may become fearful and anxious about their money. This can lead to emotional investment decisions, typically selling their holdings when they are at a low point. In behavioral research circles, this “negativity bias” happens when people pay more attention to negative than positive information.

What Happens When Investors Act on Negative News?

Reacting to alarming headlines can, and has, led to poor decisions and investment results. Emotional investment decisions have reduced long-term returns in the past and may do so in the future. (Of course, as always, past performance does not guarantee future similar results.)

These statistics from academic and industry research directly correlate investor losses with behavior following negative news:

• Periods of sustained media pessimism have correlated with investor underperformance between two and four percent annually, over one to two years.
• Trading based on negative news in social media forums caused investors’ portfolios to underperform by 1.7–2.8 percent per year compared to trades based on neutral discussions. The range of returns was impacted by different holding periods, short positions, and leverage.
• Psychology Today reported that people who “doomscroll” alarming financial news stories demonstrated increased stress and often made poor short-term emotional financial decisions.

What Successful Investors Do Different

Successful investors tend to not make investment decisions solely based on headlines or what they hear from friends or on social media. People who have grown and preserved wealth follow a few proven behaviors:

Ignore the media narrative

The daily news cycle works like this: something happens in the markets then financial journalists create a logical-sounding story to explain why the market went up or down. You may have heard these snippets:

• The market fell 1.2 percent today because of inflation concerns.
• It rallied today due to strong employment data.
• The market dropped because tech stocks faced earnings pressure.

These stories sound informative and knowledgeable. However, they are largely fiction.

The truth is that most daily market movements do not have a singular cause. They move because millions of participants make billions of decisions based on timeframes ranging from microseconds to decades, and the collision of all that activity produces a number. Many journalists then work backward to create a story that makes that number feel meaningful.

Ignore social media, friends, and strangers

How do you break free from the daily market cacophony? The answer is to set disciplined rules.

Stop talking about markets with your friends and family

Your friends and neighbors, unless they are experienced wealth managers, typically mean well, but can be dangerous to your financial health — if you listen to them. Should you really pay attention to your uncle who made money buying crypto, your young neighbor couple who think gold is terrific, or your retired friends who own private equity, option hedge funds, and hold hundreds of individual stocks and bonds?

Investors often repeat something they heard (or misheard) on a podcast, which quoted a social media influencer, which was in turn likely based on a financial journalist’s opinion of the day. It’s like a game of telephone, except your family’s wealth depends on not playing.

Neighbors and friends, and family, too, are likely to have different investment objectives, time horizons, and risk tolerances than you do, which means that what works for them could be unsuitable for you.

Similarly, many media people offering market opinions are not professional money managers, may not manage their own money, and might have little interest or knowledge of financial market history.

Unfollow social media

Consider going on a social media diet. Think of the unsolicited stock tips and market prognostications on social as the bad calories you need to cut out of your media consumption diet.

Many investors are influenced by posts that exaggerate risks or present incomplete data. Approximately 60 percent of investors reported making financial decisions based on misleading online social media content. These decisions were regretted — nearly 40 percent lost over $1,000.

The moral of the story is to limit your social media intake and listen to a professional wealth manager rather than information on posts. Relying on professional [EV1] advice and proven strategies keeps your focus where it matters most.

Delete your financial apps

Also, think about removing the financial news apps and alerts on your smartphone. Unless you like anxiety, do you really want to get persistent pings and notifications of bleak news that may tempt you to sell impulsively?

Think long-term

Long-term investors are, or should be, patient and focused on steady growth rather than immediate gains and losses. Families who pay attention to long-term goals and ignore short-term market fluctuations are more likely to minimize making emotional decisions that erode wealth.

Long-term investors know that short-term market fluctuations are normal and temporary. Markets have historically recovered from downturns and rewarded investors who maintained their positions through temporary turbulence. For example, following the 2008–09 financial crisis, the S&P 500 grew more than 300 percent over the next ten years.

Investors who thought long-term were rewarded with portfolio growth. By contrast, people who sold out missed this period of strong recovery.

Long-term investors also understand that frequent trading destroys returns. Quickly reacting to negative news often leads to excessive churn, which can generate additional fees and taxes. Investors who trade less and hold longer have often outperformed [EV2] those who constantly adjust their portfolios in response to current headlines.

According to Morningstar, the average annual returns of mutual fund and ETF investors were 15 percent lower than those of the funds themselves. This performance gap was primarily a reflection of emotional decision-making and frequent trading.

Separate emotions from decisions

When negative news strikes, successful investors maintain emotional discipline. They recognize that fear and panic can result in poor choices. By planning for volatility and remembering lessons from past market downturns, people can build resilience and create the opportunity for their investments to grow in reality over the long term, not decrease on paper during the short term.

Stick to a disciplined and written strategy

Prosperous investors have a disciplined financial plan and investment strategy. What’s more, they document their plan. Families with a written financial strategy have reported greater confidence in meeting long-term objectives and typically have larger emergency funds than those without a documented plan.

A Fidelity study found that 89 percent of families with a written financial plan reported feeling confident about their long-term financial health, versus only 56 percent for those without one.

Regularly review your portfolio

Successful and generally happy investors check their portfolio balances, but not too frequently. People who look at their portfolios daily or monthly have more anxiety and are more prone to poor decisions than those who review them less often. This is due to “myopic loss aversion,” which states that short-term losses feel twice as painful as long-term gains.

Work with an advisor

Working with a financial advisor or wealth management team can help you tune out the media noise. Excellent advisors help you avoid emotional mistakes and keep portfolio changes aligned to your unique long-term goals, not the latest headlines.

For Americans with at least $500,000 in investable assets, 82 percent worked with a single financial advisor in 2024.

Focus on What Matters

You may have better things to do with your time and mental energy than watching television news, scrolling social media, or skimming podcasts. You have a life to live, work to do, relationships to nurture, and hobbies to enjoy. The market will be fine without your constant attention. In fact, you may be rewarded generously for ignoring the news.

Instead of checking your account balance, for example, celebrate when you begin or increase an automatic investment program. Or track milestones that reflect long-term progress rather than daily fluctuations, like reaching mileposts in funding your children’s college education or your retirement plan. These achievements help you focus on what grows your wealth over time.

Replace market news with useful knowledge. Read about and study behavioral finance and market history. Some of the books you might find useful include:

• Peter Bernstein’s “Against the Gods: The Remarkable Story of Risk,”
• Morgan Housel’s “The Psychology of Money,”
• Daniel Kahneman’s “Thinking Fast and Slow.”

Frequently Asked Questions about the Positive Impact of Ignoring Negative Media Noise

Isn’t it risky to ignore daily market news?

No, your real investment risk comes from making emotional decisions based on extreme news stories rather than following a disciplined, long-term plan. Market volatility is normal, while most daily news has little bearing on your investment success over time. You may need to adjust your portfolio as your personal goals or financial situation change, but rarely because of a single headline or news event.

What are the risks of letting emotions guide my portfolio choices?

Emotional investing often leads to decisions that diverge from your long-term goals. Letting fear or excitement from headlines drive your choices makes you more likely to panic sell, chase trends, or abandon a sound strategy. Managing emotions, having set guidelines, and working with a trusted advisor help you avoid costly mistakes.

Why do many investors place such high value on talking heads on cable news?

Many investors, both self-directed and those with a financial advisor, also believe and rely on the opinions of cable news personalities. The same is often true of network and local news, radio, social media influencers, and podcast personalities. Why is this?

In psychological terms, the behavior is based on authority and familiarity bias. Authority bias is the tendency to place unwarranted trust in the opinions of people who hold positions of prominence, even when their advice may not be objective or accurate. Familiarity bias is when people mistake familiarity for expertise.

Intelligent people are not immune to the seeming trustworthiness of confident, attractive, well-known anchor men and women. This psychological tendency leads many investors to think more highly of distant specialists [EV3] than on personalized professional advice.

How can I stay objective when the news cycle feels overwhelming?

You can stay objective by focusing on your personal investment strategy, not the headline megaphones. Ask yourself if a significant news event truly impacts your long-term financial goals. Make sure to review your plan regularly and remember that disciplined investing may deliver better results than reacting to every story.

The Final Word: How to Tune Out the News

The day-to-day financial market news cycle may make you feel informed but remember that the media’s objective is to get your attention, not necessarily to serve your interests.

The most successful (and often less anxious) investors are those who ignore panic, avoid emotionally driven trades, and commit to a disciplined long-term strategy.

Work with your advisor to create a plan, stick to a review schedule, and insulate your decision-making from the high decibels of external noise. Your family’s financial future may likely be stronger and more resilient. Your future self will thank you.

As your wealth management partner, we’re here to guide, clarify, and empower you every step of the way.

Ready to get started? We are here to help.

Schedule a complimentary financial planning discussion to help you learn how to achieve your family’s goals by avoiding the noise and thinking long-term.

Disclosures:

This material is for informational use only and should not be considered investment advice.

Glassy Mountain Advisors, Inc. is an independent investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about Glassy Mountain Advisors including our investment strategies, fees and objectives can be found in our ADV Part 2 and Form CRS, which is available upon request.