Is learning how to pay attention to the right things the most important skill for investors?

May 9, 2024

What do you believe to be your most precious resource?

Though time and money are both undoubtedly important, your attention might be even more vital. After all, even if you had all the time in the world, it may be wasted if you spend it paying attention to the wrong things.

As an investor, your attention is a particularly precious resource. That’s because it can be so easily distracted from focusing on helpful sources of information and support.

Read on to learn more about the distractions that could hold you back as an investor and what to pay attention to instead to help you achieve your goals.

3 unhelpful sources of distraction on your investing journey

As an investor, one of the biggest challenges you’ll face is tuning out the noise of the headlines and other distractions that are unlikely to support you in growing your wealth. This includes:

1. Media headlines

Media headlines will often tap into your worst fears, as this is an effective way to capture attention and obtain those all-important clicks to their article. But letting yourself be whipped up by sensationalised stories and predictions is rarely going to support you in making sensible decisions about your wealth.

2. Daily fluctuations on the stock market or your portfolio

Though it’s tempting to check your portfolio on a daily basis (or sometimes even more frequently), the fluctuations in value that you might notice can be disruptive. While you might understand that these fluctuations are a normal part of investing, even small losses could stir up negative emotions based on fear. If left unchecked, these emotions can start to influence your investing decisions.

3. Investing decisions that your friends or family are making

Though it can be helpful to talk about your financial goals with your family and friends, remember that the steps you’ll take to achieve your goals are likely to be different from those around you.

Your friends and family may have different circumstances – such as time frames or attitudes to risk – which means that the investments that are suitable for them may not be suitable for you. The same is true for them: the investments that offer your money the greatest chance to grow may not be appropriate based on their circumstances and goals.

3 important areas to pay attention to as an investor

When you can direct your attention to helpful sources of information and support, you are much more likely to make meaningful progress with your investments. This might include:

1. Your personal long-term goals

One of the most important factors in choosing your investments is your desired outcome for them. For example, are you growing your wealth to be able to retire early, help your children to buy their first home, pay for later-life care, or perhaps something else?

These goals can act as your north star. When the stock market experiences volatility or you feel nervous about your investments, keep the goal in mind to remember what you are working towards in the long term.

2. The balance of your portfolio

Diversification is a key component of successful investing, as it can help to mitigate the risk that your money is exposed to. By investing in a balanced range of asset types, sectors, and geographies, if one of your investments underperforms, you may be able to recoup losses with another investment that could overperform.

Sometimes your portfolio can become unbalanced if a sector outperforms and begins to take up a larger proportion of your investments. Your planner can support you in buying and selling the most suitable investments to rebalance the portfolio, helping to ensure it continues to support you in achieving your goals.

3. Average investment returns over long periods of time

Past performance does not guarantee future performance, but looking back over several decades of returns can give you an insight into the general trends that a fund or investment might offer you over a similar length of time.

For example, J. P. Morgan reports that the S&P 500 fell in value by 18.1% in 2022, and rose by 26.3% in 2023. But when you look at its average growth over the past 20 years, Yahoo Finance reports that the average annual return was 7.7%. If you had reinvested your dividends during that period, the average annual returns would have been 9.8%.

So, though it can be disappointing if an investment underperforms in a single year, remember that it is the long-term potential that really matters.

Your financial planner can help you to direct your attention to the most helpful sources of information

It can be tough to master the art of directing your attention properly as an investor, particularly when you are first starting out. As humans, we’re wired to look for threats, which is why it’s so tricky to disengage from media headlines or do something different than our friends and family are doing.

But your financial planner can offer support and guidance to help you take control over your attention, making it easier to tune out the noise and focus on what matters.  

Get in touch

If you’d like to learn more about how we can support you in building a diversified portfolio that helps you to achieve your long-term goals, please get in touch.

Either contact your financial planner directly, email us at or fill in our online contact form to organise a meeting and we’ll get in touch.