An investor's guide to staying sane - forget the big picture

Investors can be overwhelmed by the sheer volume of daily economic data, forecasts and comment. Little wonder: this noise is designed to confuse you into trading too much. But the solution is simple, says Tom Bulford - ignore it. Here's what to focus on instead.

In 1981 the New Yorker magazine published a cartoon that I have never forgotten. It showed a man watching the evening news on television. Here is what the newsreader was saying:

"On Wall Street today, news of lower interest rates sent the stock market up, but then the expectation that those rates would be inflationary sent the market down, until the realisation that the lower rates might stimulate the sluggish economy pushed the market up, before it ultimately went down on fears that an overheated economy would lead to a re-imposition of higher interest rates."

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Tom worked as a fund manager in the City of London and in Hong Kong for over 20 years. As a director with Schroder Investment Management International he was responsible for £2 billion of foreign clients' money, and launched what became Argentina's largest mutual fund. Now working from his home in Oxfordshire, Tom Bulford helps private investors with his premium tipping newsletter, Red Hot Biotech Alert.