top of page

Navigating the path with nerves of steel

Updated: Oct 5, 2023

Even the Simplest Tasks can get Messy


In today's market, it's easy to lose focus of earnings and estimates. There are always a number of headline worries competing for our attention, from inflation to war to rising interest rates. But it's important to remember that earnings are still the most important driver of stock prices in the long run.

So how do you stay focused on earnings when there's so much else going on? Here are a few tips:


  • Start by understanding the fundamentals. What are the key factors that drive your company's earnings? How is the company positioned in its industry? What are the risks and opportunities that the company faces? Once you have a good understanding of the fundamentals, you'll be better able to evaluate the impact of headline worries.


  • Don't overreact to short-term news. It's important to remember that stock prices are volatile in the short term. But over the long term, stock prices tend to follow earnings. So don't let short-term news stories distract you from your long-term investment goals.


  • Focus on the big picture. Don't get bogged down in the day-to-day movements of the stock market. Instead, focus on the long-term trends that are driving the economy and the stock market. This will help you to stay focused on the things that matter most.


Here are a few examples of how headline worries can lead investors to lose focus of earnings and estimates:


  • Inflation: Inflation is a major concern for investors right now. But it's important to remember that not all companies are affected by inflation in the same way. Some companies, such as commodity producers, may benefit from inflation. Others, such as companies with fixed costs, may be hurt by inflation. It's important to evaluate how each company is likely to be affected by inflation before making any investment decisions.


  • War: The war in Ukraine is another major concern for investors. But it's important to remember that the stock market has historically performed well during wartime. The key is to focus on companies that are well-positioned to benefit from the war effort. For example, defense contractors are likely to do well during wartime.


  • Rising interest rates: Rising interest rates are another concern for investors. But it's important to remember that not all companies are affected by rising interest rates in the same way. Some companies, such as banks, may benefit from rising interest rates. Others, such as companies with high levels of debt, may be hurt by rising interest rates. It's important to evaluate how each company is likely to be affected by rising interest rates before making any investment decisions.


It's important to remember that earnings are still the most important driver of stock prices in the long run. So don't let headline worries distract you from your long-term investment goals. By focusing on the fundamentals, understanding the big picture, and not overreacting to short-term news, you can stay focused on earnings and make better investment decisions.

For more on topics we discuss with our clients, tune in to our latest PennyWise Financial Podcast. You'll hear more details about how we plan, some of the latest news that's relevant to your investments, and get a flavor of who we are. Click the link below to watch a clip of our latest Podcast Episode or look below for a link to the full episode.




Everyone wants to offer advice. We hope you have the right person. A trusted person to guide you on your path to achieving your goals. If you're not working with the right team or want a second opinion, we hope you consider our services. Follow our content to learn more about our process, investment philosophy and hear real life accounts of what our clients are dealing with and how we help them.



And that's only the beginning...Reach out and schedule a consultation to discuss your situation. We'll walk you through your options and help you make the right choice for your goals. Click below to listen to the latest PennyWise Financial Podcast and hear more commentary on the stuff you need to know, and much more. Check out another episode below or view our catalog of videos.


Want to learn more? Follow our latest market commentary, firm updates, or anything financial via our blog, Podcast or Vlog.




Listen on your favorite platform:


242 views0 comments

Recent Posts

See All

Comments

Rated 0 out of 5 stars.
Couldn’t Load Comments
It looks like there was a technical problem. Try reconnecting or refreshing the page.
bottom of page