Ignoring market noise is difficult but not impossible. Here’s how to do it.

livemint.com:

If you’re thinking of exiting the bull market, read this Similarly, the other call was to stop new money flows, leaving current investments intact. In fact the fund manager said in the same note, “The valuation and growth prospects for our portfolio companies look reasonable, and we will continue to hold them." He went on to say it was difficult to find new ideas, adding, “Our offshore fund, which is currently in a very nascent stage, will continue to accept funds." Underneath the scary headline, the situation was that a research house, at worst, couldn’t find new ideas. The fund manager owned stocks at reasonable valuations.

Like you, his clients are probably happy as they held on to their investments. As you can see, a scary headline can often mask a more benign reality. So if you come across such calls by the big guns – either bullish or bearish – be sure to understand their entire view and, more importantly, see what they actually do.

Actions speak louder than words, so follow their actions (if at all) and ignore their calls. I don’t mean to suggest that they are misleading, rather that headlines often don’t tell the whole story. The other skill you can cultivate from this is learning to contextualise big calls.

For instance, if a big momentum trader predicts a market turnaround, you probably don’t have to pay attention to it as a long-term investor. Similarly, if the advice is from a quantitative investor and you are a value investor, you should know it isn’t for you. If you get these two things right, you’ll understand that most of these big calls are just noise.