How do you decide what to invest into?

I often wonder how long the media can sustain itself by creating noise and stories and how finance forums exist with such drivel written.

Some people tell me that time flies by and I disagree. Time stays and we fly by and every minute reading the above, is a minute you cannot get back.

Be very careful with financial noise. The finance world is highly complicated and financial writers know that. Let’s give you an example of some of the headlines and my responses to them. Most headlines exist to alter your thought process and whilst fine for a story about football, there may be better places to obtain data for making financial decisions. Remember much of this noise is there for someone to sell what they have; it's up to you to see through it.

“Commercial property returns near record low of 1974”. This is a normal headline to get you to think because something is lower than a point in the past you will be ‘getting a deal’ if you go in now. Nonsense, they have a lot further to go especially with so many up and coming empty properties on the high street putting such a strain on rents.

“Mini rallies in the stock market should be used as selling opportunities”. Just so happens this quote was by an individual who runs a firm that benefits from volatility in the market. No volatility and he is out of business – nice story though.

“$2000 an ounce is a realistic possibility for gold next year”. It’s a realistic possibility my hair might also turn dark next year, but it will need a little investment. This quote came from a company called gold money so you work it out.(1) Goldman Sachs said oil would reach $200 dollars yet not even the cut in oil production can stop oil heading right back to where it averages - $30. This initial quote came from a company who was neutral on its oil stocks when it made the quote, and all the energy companies jumped on the back of it with ”oil has a natural floor of $100 as Opec need to keep it at that” Mmmm? Easy come, easy go.

We predict that house prices at the end of the year “will be at similar levels as at the end of 2007…. We do not believe there will be a house price crash…..prices will be supported by pent-up demand from first-time buyers and a shortage in the supply of housing to meet the needs of UK's rapidly growing population”. (2) My my how wrong Nationwide got that. Hometrack said pretty much the same thing for 2008, but spare a thought for Assetz (‘leading uk and overseas property specialist” – their words) who must hate the internet for storing this marvelous quote: “ House prices will rise by 5% and rent by 10%...With the credit crunch now receding, …supply constraints and buyers' uncertainty about the housing market also means next year is likely to see an increase in the demand for rental accommodation from first-time buyers and immigrants -- hence the rise in rents. So we predict 2008 will be a very prosperous year for the buy-to-let investor.” (2) “Property never been better for cash buyers” is the final property noise.

Why after the biggest bubble in my living memory are we ready for such a bounce on the housing market when in the last one a straightforward money market cash fund outperformed property by over 257% over a ten year period. Property actually began to increase in price five years after the fall began, and it was six years before your property would have been worth the 1990 value.(3) With 1m empty properties in the UK, this ‘leading’ estate agent was having a bit of a laugh last week.

'Readers beware' and seek independent financial advice you can rely on.

For advice on financial planning call Peter on 0845 230 9876 or e-mail info@wwfp.net

(1) cantos (2) Fool (3) Lipper