Focus On The Data, Not The Noise

Adam Sarhan, Forbes Contributor

One of the many traits successful investors share is their ability to filter out the noise and focus on the facts that actually matter. I can not stress how important it is to be able to focus, and remain focused, when things quickly turn chaotic on Wall Street.

Power Of Focus: 

When Warren Buffet first met Bill Gates, they instantly hit it off and had a great time together. Interestingly, both extremely intelligent people had zero expectations about the other person ahead of the meeting but instantly clicked. After the initial meeting, both men were asked what they liked the most about the other and they both (independently) said the same thing: focus.

Focus On The Data, Not The Noise:

We all know all the crazy headlines that are coming out of D.C. Stepping back, one would expect the stock market to be down substantially. Instead, we are trading just below record highs. The reason is simple: The economic and earnings data remains strong and warrants another move higher for Wall Street. I spoke to Chad D. Roope, CFA Portfolio Manager at Fundamentum, A Division of Stratos Wealth Partners, Ltd, with $12 billion under management, and he told me, "Presently, earnings are growing strongly, recent corporate and individual tax cuts are likely to help and the economy is growing without much inflation. These are all generally good fundamentals for risk assets."  He also pointed out that while the forward P/E for the S&P 500 around 17.5 is somewhat elevated relative to history, it's not extreme given strong economic data, earnings and low interest rates.

Focus On The Facts, Not The Noise:

With all this in mind, disciplined investors who focus on fundamental data and treat noise appropriately are likely to be rewarded in our current market and economic environment.