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It's a trying time for investors right now.

On the first Tuesday of every month, we expect to be welcomed with an interest rate rise by the Reserve Bank and negative media commentary regarding the Australian economy.

In this age of social media, 24/7 media coverage and clever marketing algorithms, it can be hard to block out the negative noise when it seems to follow you everywhere you go.

The fact it does follow you though, is no accident.

As consumers in a digital age, it should be no surprise that investment articles you read on websites or social media influence the type of content you are offered through these platforms. 

Marketing algorithms are tracking your interests constantly, so if you read an article about the negative state of the investment market, you will see more articles supporting the same viewpoint.

It then becomes very easy to start believing all the negative content, which will feed any concerns you may have about your current investment strategy.

This is, unfortunately, the digital age we live in.

While it is true that markets are volatile at the moment and it is difficult to hold your nerve, we only need to look back at the start of the Covid pandemic in 2020 and the news coverage at the time to understand the difference between perception and reality.

Articles in March 2020 predicted a return to the days of the Great Depression and a catastrophic impact on the Australian economy. Predictions were made of over 15% unemployment, and the global equities market reacted with recession fears removing $9 trillion from the market in days.

With the benefit of hindsight, we now know that the Australian economy faired very well during the pandemic, with the unemployment rate reaching historic lows and the global equities market bouncing back later in 2020 as viable vaccines became available.

Put simply, those that were patient and focused on their investment plan did better than those who sold assets that had already fallen in price. They benefited from being patient and staying the course.

But the big challenge for investors is blocking out the noise. 

Doing this isn't easy, but one good way is to review the following investment lessons that have stood the test of time:

Lesson 1:  There is no such thing as easy money

Thousands of people buy and sell stocks daily, but the number that do it profitably is small. It's easy to get sucked into the prospect of easy money, but always remember there is no such thing.

Lesson 2:  Always expect the unexpected

Any attempt to time the market is fraught with peril. If anything, the Covid pandemic has taught us to expect the unexpected, especially when it comes to the investment markets.

Lesson 3: An investor's greatest enemy is often themselves

Investors often let their emotions get in the way of rational thought. They also overestimate their abilities as an investor, often letting ego get in the way of tried and true investing principles and underestimating the risk associated with an investment. This often leads to poor investment decisions. You must not let your ego get in the way of making intelligent, rational decisions.

Lesson 4: Don't be influenced by recency bias

When markets are good, investors tend to be overly optimistic. Then, when markets are down, they become pessimistic. This is called recency bias, and it's easy to be influenced by it. When it kicks in, investors start to think that the good times will continue and vice versa. But as we know, markets fluctuate and go both up and down. By not being influenced by recency bias, you are not as affected by market fluctuations and benefit from investing for the long term.

Lesson 5: Recessions are always identified with a lag

The truth about recessions is that the economy is often on the road to recovery by the time an economy is identified as being in a recession. Calls of a recession are made based on analysis of market conditions over a period of time. The data used to determine a recession is not available in real-time and is analysed often months down the track which means they are identified with a lag. Any market noise about a recession needs to be viewed through this lens and not factored into current investment decisions, as you are making decisions based on old data.

Lesson 6: To make money you need to learn to be patient

As Warrant Buffett says, "There is nothing wrong with getting rich slowly". Patience is the cornerstone of Buffett's investment strategy, and he always advises investors to remain steady when the markets go haywire. It's sound advice and helped him to become a very wealthy man.

As we've seen during 2022, the investment markets are fluctuating significantly and it's easy to be influenced by the negative press. What's important is ensuring we learn the lessons of the past, stay patient and focused on your plan and long-term goals. As always, if you want to discuss your current investment strategy and review your plans, one of team of financial advisers would be happy to help. 

General Advice Warning

Any advice or information in this publication is of a general nature only and has not taken into account your personal objectives, financial situation and needs. Because of that, before acting on the advice, you should consider its appropriateness to you, having regard to your personal objectives, financial situation and needs.

Before making a decision to acquire a financial product, you should obtain and read the Product Disclosure Statement (PDS) relating to that product, it is important for you to consider these matters and to seek appropriate advice. Past performance is not a reliable guide to future returns. The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases, the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. Opinions constitute our judgement at the time of issue and are subject to change. Neither we nor our employees give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document.

Identity McIntyre Pty Ltd (ASIC No 461171) is a corporate authorised representative of IMFG Pty Limited, Australian Financial Services Licensee number 527657 Registered Office at: Level 8, 171 Clarence Street, Sydney NSW 2000.