Don't Think About Your Investments When You Watch CNN

Stop the war


Making investment decisions under influence of just-heard news is one of the most foolish ideas, I can think of. If there is one golden rule, which regards to long term investing, it would be "FUNDAMENTALS MATTER, NOT NEWS".

Almost every news is irrelevant. Even brexit was irrelevant to the GBP value. With all respect to victims, the shelling of a city is irrelevant to the EUR/USD exchange rate in a long run. And even if it's not, all we will have, will be a bubble. Any investors that react upon news will lose their money, and clever foxes who know what a bubble looks like, will profit.

Now the EUR/USD has been falling for almost a month. Many traders say, it's oversold. I don't know what "oversold" means (it's some sort of blabbering used by moving average traders), but the rate has to spike sooner or later. Better be ready, do not go bust because an unexpected 500-pip spike happened. And do not sell EUR/USD because a city was shelled, or buy because it was not shelled. Making investment decisions requires another type of analysis.

The only clever strategy that comes to my mind is - pick a straight path through chaos. Base your strategy on long term fundamentals, not on news, and have your risks under control. Forget about your investments when you watch CNN.