The Noise: Investing Amidst Uncertainty

We live in a time of constant news, analysis, and gossip—from here on referred to quite simply as “noise.” Whether it’s delivered by the financial news, gossip among real live humans, or doom scrolling on your handheld screen of choice, the constant noise of the day beckons you to take urgent action on your investments. Sometimes the noise comes from within. Like a detuned radio with an infinite battery embedded in the back of your skull, the noise refrains: “You should have bought the thing that went up 200%; how did you not know that would happen?” or “Clearly, the market was overvalued; clearly, there were risks in the system. It was so obvious … why didn’t you sell before the downturn?”

The noise is the source of much anxiety and unhappiness. Any action, as long as it’s done urgently, will satisfy the noise, but will happiness follow the noise-induced action? Like the beautiful and enchanting song of the sirens urging Odysseus ever closer, the noise projects a false wisdom: “We know all things that come to pass upon the fruitful earth.” But just like the sweet song of the sirens, the noise will lead you (and your investment returns) to certain doom. It is the enemy of your success in all things, investing and otherwise.

So, what does this all mean for today, for markets, for anything? The noise is loud, and markets are responding daily. Tariff this and trade deal that, uncertainty abounds. The narrative is loud, but the direction is unclear, causing much uncertainty. This is the market’s current problem and most investors’ current source of noise. The chart below suggests that uncertainty around trade policy may be THE driving force behind current market fluctuations.

The Market Problem right now:

This chart offers a really nice and possibly comforting explanation of why the market is behaving the way it is, but it has one major problem: it is not actionable. It is not possible for you or anyone to know what the news will be tomorrow. No one can accurately forecast the magnitude and duration of trade policy uncertainty, or when some other news may unseat that as the driving narrative.

Before this narrative took hold, markets were focused on the AI narrative, and inflation before that. The focus will shift again in the future, and that is the main point here, that there is always noise. The noise always seems so clear in the moment, “Of course, this is a thing, you should have known!” the noise will tell you. But the signal is never clear, and it changes so quickly that it is impossible to catch (even the seemingly omniscient mega hedge funds lost money this year).

It is foolish to try to catch those fleeting signals, and why would you even want to? People have different reasons for investing, they have different time horizons, different goals, different principles and beliefs. The market is the sum total of all of that for all market participants. To alter your course in response to the noise is to adopt someone else’s goals, someone else’s beliefs and someone else’s principles.

This is why I opened with the quote from Marcus Aurelius. The world was different 2000 years ago, but as Marcus Aurelius’ writings show, the problems were often the same. Taking inspiration from Marcus’ wisdom and applying that to our current problem, one might say:

Let your principles and goals be the rock, unmoved by the crashing waves of endless noise.