How can you filter data into wisdom? Turn down the noise and sleep well at night by learning to prioritize and focus on what’s important!
KEY TAKEAWAYS
- The mass amount of Information and opinions creates a system that often amplifies anxieties and creates distraction.
- The circle of anxiety creates questions where there are no answers. The real question you should ask yourself is, “why does this matter?” “How does this opinion impact my life?”
- To filter information into wisdom turn off your television monitor and stop listening to the constant streams of “breaking news”. Second, focus on creating a practical plan that you are in control of.
- A plan you control outlines individual priorities based on significance and time frame of what’s important to you and your family.
- When you have a plan that anchors your wealth, you can make more informed decisions with a clear roadmap to help guide you towards your destination
Informational Anxiety
When you wake up in the morning what’s the first thing you do?
If you are like most people in the digital age you reach for your phone to catch up with your favorite blogs, respond to text messages, scan Twitter feeds and check in with your friends on Facebook. In a matter of minutes you have been exposed to hundreds of posts, articles and commentaries, each providing a divergent view on the world, social commentary, and economic analysis. Some are true, some not. The issue becomes how do you filter the noise?
According to Google’s executive chairman, Eric Schmidt, we create as much information in two days now as we did from the dawn of man through to 2003. A full 90% of all the data in the world has been generated over the last two years. It is difficult to comprehend, but since the internet was developed 25 years ago the technology has shifted from a luxury item to a necessity.
While access to information is seen by most as a benefit to society (we now have instant communication and access to experts for answers for our questions or concerns), the byproduct is a system that often amplifies anxieties and creates distraction.
What do you think?
That is the question that is frequently asked by journalists to forecasters, banking executives and established financial billionaires to provide meaningful insight to where they think the future of the financial markets are heading. As you can see from the headlines, 2016 has brought with it perceived economic slowdown and turbulent global stock markets propelled by fear, anxiety and uncertainty while at the same time proving the prospect for opportunity.
- “The Bank of Scotland penned a report stating that we are doomed and heading for a catastrophic market crisis”
- “Goldman Sachs believes the markets are undervalued by 10%”
- “Billionaire Carl Icahn thinks corporate high yield credit is headed for trouble”
While all of these commentaries from well informed experts are interesting and convincing they are somewhat contradictory, making it difficult to translate the information into wisdom in order to make good decisions. The real question you should ask yourself is, “why does this matter?” After all, they are just opinions and are in no way directly related to you or your life goals.
It is exceedingly difficult to gain perspective and make good decisions with your money when you don’t know who to trust. Imagine your money is invested, markets are up and down on each day and we all sense that deep gulping sensation as it becomes increasingly more difficult to swallow.
That lump in your throat is creating more anxiety for you as you flip through the television channels scanning the major headlines, listening intently to the economic forecasters while receiving push notifications from your smart phone about your favorite investors on twitter for up to the minute advice and direction.
The solution is simple, but not easy to follow. First turn off your television monitor and stop listening to constant streams of “breaking news.” Second, focus on creating a practical plan that you are in control of, not a plan with complex assumptions and 40 pages of charts and diagrams that create more confusion.
A plan you control outlines individual priorities based on significance and time frame of what’s important to you and your family. Your plan should allow for protection of high priority items that impact your life on a short term basis where the pain associated with losing is the greatest. These items such as paying your mortgage, monthly living expenses, marinating your lifestyle, and sending your children to school are the highest priority and should serve as the foundation to your plan.
Once these essential priories are protected you can then focus on maintaining and enhancing your lifestyle, including strategies’ to combat inflation and help achieve goals that are three to five years into the future.
Once we have taken care of our immediate goals we can look towards achieving our aspirational goals, which serve as the cherry on top to the sundaes of life. These are goals we aspire to achieve from when we are children; they include a comfortable retirement, leaving a legacy for our family and favorite charity, that red Ferrari, the dream home with the white picket fence, or a trip around the world. In other words, we have a lifetime to achieve these goals, providing the ability to take more risk since short-term fluctuations won’t impact us, as the luxury of time is on our side.
Having multiple risk tolerances based on the dynamics of your life affords the opportunity to relax, turn down the noise and breathe with ease. It unplugs us in the emotional sense of always having to feel like we are missing out or chasing information to find an answer. A robust approach allows for this desired “peace of mind” by helping to provide context of how our plan dynamically adjusts over multiple timeframes and priorities.
Our individual strategy and more importantly what we control provides greater reassurance than listening to the news or trying to time markets, which we can’t control. Ultimately your plan should provide context to your life to avoid unnecessary distraction and filter information that is relevant to your life. When you have a plan that anchors your wealth, you can make more informed decisions with a clear roadmap to help guide you towards your destination.
If you have questions or would like to discuss the above, please feel free to contact our office at
416 369-8177 or by email at ryan.gerstel@cibc.ca.
Regards,
CIBC Wood Gundy
Works Cited
Dragland, Åse. "Big Data, for Better or Worse: 90% of World's Data Generated over Last Two
Years." ScienceDaily. ScienceDaily, 22 May 2013. Web. 12 Feb. 2016.
Eddings, Cordell. "Junk Bonds Are Tanking and Icahn Says Meltdown `Just Beginning'"
Bloomberg.com. Bloomberg, 11 Dec. 2015. Web. 12 Feb. 2016.
Fletcher, Nick. "Sell Everything Ahead of Stock Market Crash, Say RBS Economists." The
Guardian. Guardian News and Media, 12 Jan. 2016. Web. 12 Feb. 2016.
Siegler, M.G. "Eric Schmidt: Every 2 Days We Create As Much Information As We Did Up
To 2003." TechCrunch. N.p., 4 Aug. 2010. Web. 12 Feb. 2016.
Zega, Roxanna. "Goldman Sees 11% Upside in S&P 500 After an 'Emotional' Selloff."
Bloomberg.com. Bloomberg, 14 Jan. 2016. Web. 12 Feb. 2016.
The views of Ryan Gerstel (Gerstel Wealth Management) do not necessarily reflect those of CIBC World Markets Inc. Clients are advised to seek advice regarding their particular circumstances from their personal tax and legal advisors. This information, including any opinion, is based on various sources believed to be reliable, but its accuracy cannot be guaranteed and is subject to change. CIBC Wood Gundy is a division of CIBC World Markets Inc., a subsidiary of CIBC and a Member of the Canadian Investor Protection Fund and Investment Industry Regulatory Organization of Canada. If you are currently a CIBC Wood Gundy client, please contact your Investment Advisor.
