[quote=Snick]Financial news may be a tool to induce churn. The more sales, regardless of the reason, results in more commissions. Similar to real estate.[/quote]
I don’t know if the actual intent is to induce churn, though the results are often churn. There are multiple forces at work. There are purma-bulls and purma-bears each wanting to voice their opinion/get their name in the paper. There are hedge fund managers trying to move the market (down so they can buy in, higher so they can sell out) by ‘leaking’ misleading info to reporters who really don’t do any research. The result though of all of this and people with poor long term memory – is churn. These days, there are not many commissions on stock transactions and what commissions there are, are very small. The bid/ask spreads are also much smaller. In the early ’80s, to sell $100K of stock would mean commissions of around $1,000 (1%). Bid/Ask spreads were 1/4 to 1/8 a point at best – more often 1/2 a point ($0.25 to $0.125 a share, more often $0.50/share). As a result, there is not too much profit in ‘churn’ itself. There is more profit in short term manipulation.
I do check daily, but only very quickly. I have a file ( *.txt or *.docx.. etc) that I have notes for everything I currently hold and currently am watching and what my plans are for that issue(stock/mutual fund/etc), as well as what to look out for. I review the prices, news, etc with that note file open and cross-checking notes. I avoid most news that are not releases from the company I have invested in. Max time is about 1 hour, average about 10 min or less. Then I log out and close the file … and fuggetaboutit. No point in getting stressed out on anything I can’t do anything about.
