Tune Out the Noise

Have you ever noticed how noisy the media is when it comes to finance, investments, or even your retirement? I often have a news program on – but usually have the sound turned to “mute.” That’s the volume I tend to prefer.

Glancing up at the TV last week, I saw a clever ad from a company that not only caught my attention, but was actually relevant. The commercial opened with several scenes depicting a person looking for some peace and quiet. All the while four financial folks dressed in suits, speaking loudly and talking over one another, pursue them. This noise grows until the person can’t make out what is being said. It was a perfect example of just how noisy this profession (and those in it) can be.

True investors, those that view the possession of individual stocks as partial ownership of a company, do not listen to the noise. I believe these investors have an advantage over Wall Street professionals. Rather than succumbing to the herd mentality and chasing an extra 1-2 percent, these investors can value a company for what it is: a group of people whose mission is hard work and finding ways to do things faster, easier, cheaper, and better. That is the goal of nearly every business or organization. The average investor can see past a stock price and really value a company based on its merit.

I believe many financial companies and media don’t make money when investors hold their ground. Standing still is in opposition to what the advertisers in the media want. They are in the business to get the public to trade, buy and sell, and to change things up. Movement generates transaction commissions. Financial companies profit on those commissions and in turn invest their advertising budgets in more commercials to perpetuate the cycle. This cycle may keep you second-guessing your every decision.

But at Prosperion we believe in picking the right investments and sticking with them, often for a long time.

We believe examples of great investments include companies that:

  • Sell their product or service to a lot of people – consumers want to buy their products
  • Have a “wide moat” business – it is difficult for competitors to come in and compete
  • Make a nice profit on what they do – the reward for solid products or excellent service
  • Share a portion of the profits with owners – investors in the form of a dividend
  • Grow the dividend – consistent increases in the income they distribute to owners

For a more detailed description of our investment strategy, please visit our article on Growth of Income Investing.

So when those pesky ads come up on TV, reach for the mute button or fast-forward through them. It can save you and your net worth a lot of pain and anguish.

Thank you for being a client of Prosperion Financial Advisors.

Steve Booren

Steve Booren is the Owner and Founder of Prosperion Financial Advisors, located in Greenwood Village, Colo. He is the author of Blind Spots: The Mental Mistakes Investors Make and Intelligent Investing: Your Guide to a Growing Retirement Income and a regular columnist in The Denver Post. He was recently named a Barron's Top Financial Advisor and recognized as a Forbes Top Wealth Advisor in Colorado.

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Stock investing involves risk including potential loss of principal. The payment of dividends is not guaranteed. Companies may reduce or eliminate the payment of dividends at any given time. No strategy ensures success or protects against a loss. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.