That is the subject of an email message I received this morning. It was from a new investor who is over-whelmed by the information dump that happens daily.

“No matter how hard I try I can’t sort this stuff out. Some say things are bad, some say things are fine. Some say the stock market is going lower, some say higher some say we are stuck in a trading range. Builders seem to be imploding. Lenders are screaming for lower rates from the government. I can’t even begin to explain how confused I am over the inflation numbers. Is it up? Rising? Stable? Falling?

“To sum it up - I am about to seriously consider running with scissors! “

Feel familiar? If it does don’t beat yourself up over it. We live in an information overloaded society. The key is to figure out which data matters to your particular strategy.

For example, if you are a long term investor in stocks then you have picked your short list you follow and as long as their fundamentals remain stable you buy them when they go on sale and hold them for a long time.

But, if you are a stock trader, you look for the natural cycles and try to ride the waves.

Both of those types of investors have access to the same data but they pay attention to different parts and sometimes their actions are 180 degrees out of sync. A trader may sell a position while a long term investor is adding to theirs. Same stock, different strategy.

Is one more right than the other? That is a different debate all together.

But, unless you want to continually live in crisis mode when it comes to your investing, you have to learn which information you can safely ignore.

To complicate matters, what you can ignore is not constant.

Last year at this time, the forward looking data showed we were headed toward a downturn. So, at the Field Guide we were focused on preparing for that down turn. Now, we are in it and the forward looking data leads us to prepare for the next up cycle.

Last year we were looking at data telling us how the economy was weakening and pretty much ignoring the data trying to sell us on how strong it was. Now, it is just the opposite. I don’t care how weak the economy or stocks or real estate are today. I want to have some guidance as to where they are going to be later this year and leading into next year.

As a long term investor in stocks, I look for opportunities to add bargains to the portfolio. Then I trade covered call options to ride the natural up and down cycles all stocks experience. Trust me on this one. The investors who held Google as it went up and then sold covered calls with a strike in the 700’s are not at all concerned about it being in the 500’s now. I am not one of them, btw, I do not own any Google stock.