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[Read The News, But Don’t Trade On It. Sven Tells You Why.] By Sven Carlin on December 6, 2016 [man-coffee-cup-pen] - Today we’ll look at a few examples and discuss how news influences markets and creates opportunities. - In the end, trends prevail, so focus on them. “Yesterday’s News Is Tomorrow’s Old Paper” The job of financial journalists and analysts is to be constantly producing copy to fill the empty spaces in newspapers and online platforms. Wherever you look, there is breaking news, opinions, and analysis about the latest news or hype filled with advice for your portfolio and on what you should do. As most online platforms make money from ads, news has to be constant, spectacular, and sold to you as very important. Here’s a simple exercise: write down this week’s most important news related to the stock market, and put the paper somewhere where you will find it in about six or more months, for example, into your summer swimming gear. When you find it again, compare the nonsense that was written with the new worries and situation. Alternatively, you could also try to find some old news from 6 months ago and start reading it. Reading some news today and then looking back at it after six months is a great way to create a strong investing mindset that will give you the courage to act, and not panic, when there is blood in the streets. It may also give you a nice laugh while reading what you thought was the most important piece of information for this week while also getting my point across that news shouldn’t influence our stock market decisions. One day it will be all about Greece, the next all about the Yuan’s devaluation, and the day after that all about U.S. housing starts. I could go on and on. You’ll see that all the news is focused on one topic for that day and that very quickly after, there is a new topic. This is simply because the average human brain can only easily focus on one topic at a time, and adding topics makes things more complicated and difficult to follow. Trying to calculate the impact of specific news and the relation of that news to businesses that have their stocks traded on the stock market doesn’t make you the hotshot at any party, so the general wisdom is to follow the crowd. The constant conundrum is that news produces results in typical stock market swings. One day the stock market goes up 1% and everybody is positive while the next day it is all doom and gloom everywhere with the stock market crashing. We are currently in a positive trend with the indexes reaching all-time highs as investors hope things will get much better. There isn’t much discussion about the upcoming interest rate hike, strong dollar, corporations distributing more than they earn, and no earnings growth in the last two years. None of this is news, but these trends are the ones that will determine your long-term returns. Before concluding today’s article with making a differentiation between news and trends, we’ll first analyze a few examples of how news impacts the markets. [Easy-to-use Signal System Picks Stocks With Uncanny Accuracy] Here are several stocks our system said to buy: WNC shot up 288% after system said BUY VCI shot up 233% after system said BUY ETM shot up 953% after system said BUY Plus ... get over $398 worth of valuable books, videos, and reports just for trying this system risk-free for the next 30 days! [Click Here To Try It Risk-Free For The Next 30 Days!] "Artificial Intelligence" Is Crushing Buy And Hold Investing The compound annual returns generated by computer automated trading strategies have crushed buy and hold investing. One strategy, disclosed just ahead, has produced compound annual returns 56X greater than the S&P 500. Deploying this logic in your portfolio could be a retirement game changer. To see how you can put this Artificial Investing Intelligence to work in your portfolio [click here.] Examples Of News Influencing A good example of how news impacts market prices is iron ore. In January 2016, many analysts had cut their iron ore expected prices. [Citi] forecasted iron ore prices to be around $35 a ton through 2018 based on slowing demand and a global supply glut. You probably remember the beginning of 2016 when most people expected a slowdown in China based on news about Chinese debt, bubbles, etc. The slowdown didn’t materialize, demand remained strong, and iron ore prices rebounded. [figure-1-iron-ore] Figure 1: Iron ore prices. Source: [Index Mundi]. Understanding the difference between news and long-term inevitable trends will allow you to seize investing opportunities. Companies like Rio Tinto (NYSE: [RIO]) and BHP Billiton (NYSE: [BHP]) were simply too cheap back in January considering their global importance as suppliers of primary materials. [figure-2-rio-bhp-1] Figure 2: Rio Tinto and BHP Billiton. Source: [Nasdaq]. Another example of how news is short term and can affect the stock market is the Ebola effect on Lakeland Industries (Nasdaq: [LAKE]), a producer of protective clothing. Figure 3 shows how news can influence one stock in a very short time, making the price surge in a moment but soon return to normal as the news fades and shifts to something else. [figure-3-ebola] Figure 3: Lakeland industries, Inc. share price movement. The chart clearly shows how in a matter of few days in October 2014, Lakeland stock jumped from $8 to almost $30. If you would have had Lakeland stocks in your portfolio, it would have been great for a few days, but quickly after, the news shifted to something else and LAKE went back to where it was. The most common mistake investors make is to buy in the craze, and as you can see from the chart, most investors that bought above $10 lost money. Another good example is the Greek crisis. Below you’ll see a typical news [headline] that explains what was going on. [figure-4-headline] Source: [USA Today]. To give you a sense of how sensational the daily news is in relation to history, Greece became independent in 1832 and has been in default for approximately 50% of the total years it has been independent. To add to this point, Greece’s GDP is 0.38% of the World’s GDP, thus practically irrelevant for global business and the probability of contagion is minimal. But sensational news can make the Dow Jones index drop 350 points, or 2%, on fears that Greece will default. Greece didn’t default. It’s still in trouble, but no contagion effects have been seen globally. The point of these three short examples is that stock markets are influenced by news as it is common that people react to what they hear. This commonality creates the notorious volatility on the stock markets. Dealing With News & Understanding Long Term Balances & Trends In order to deal with the constant bombarding from news and advertisements on your mind, you need to think globally and with a longer term time frame. The world will continue to go on and grow. The 20th century was one with two World Wars, Vietnam, the Cold War, nuclear weapons, AIDS, the Titanic, and I could go on and on about all the bad things that happened in the 20th century. But if you compare the quality of life at the beginning of the century with the quality of life at the end of it, you can easily conclude that the human race is destined to grow and prosper. However, we all follow news. Want it or not, you can’t escape it. TVs are everywhere, newspapers are almost free, online content is everywhere, and we all have a natural curiosity toward knowing what is going on, which is good because we are always learning. The problem is when too much news shifts our focus from important things to meaningless things. Here at Investiv, we prefer to focus on trends. You can read our zinc deficit article from June [here], get some info on India [here], or about risks in Europe [here]. These articles are all based on longer term trends, the main driver of stock prices and investment returns. Stay tuned to [Investiv Daily] to avoid worthless news and to get analysis on long-term trends, market balances, and the real risk factors that will impact your portfolio. Editors Note: In the near future, Sven Carlin—fund manager, Ph.D., and daily contributor to Investiv Daily— will be launching Global Growth Stocks, a paid newsletter focused on companies perfectly positioned to profit from the fastest growing emerging markets. Developed economies have matured and growth will be slow. Countries such as China, India, Brazil, and many others will be the global economic drivers. Sven has already written four in-depth issues featuring four companies that could hand early investors gains of 300% to 500% over the next several years. These issues will only be made available to paid subscribers. If you would like to be notified when Global Growth Stocks officially launches, [please click here to be automatically added to the list.] Beta subscribers will have the opportunity to subscribe for a deep discount off the regular annual subscription rate. 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