If we made our investment decisions based on the headlines we would be unlikely to ever invest. Currently the media is highlighting the Iran War, the closure of a critical shipping route, higher oil prices, increasing inflation and rising interest rates, all meaning rapidly rising living costs.

The headlines say technology companies are over-priced and artificial intelligence programs will eliminate thousands of jobs. Office buildings will be half empty as a result. Young people can’t afford to buy a home. And someone said there could be a recession ahead.

Quick, let’s put our money in the bank and batten down the hatches. Don’t spend, invest, or take any risks. Perhaps we need to find a cave somewhere.

Experienced investors know to ignore sensational headlines when considering new investments or reviewing existing ones. They rarely have any long-term effect.

This is demonstrated by the Australian share market. Prices are down just 1.2 per cent this year. Dividends paid have been more than that so overall shares are ahead for the year. On Tuesday the MSCI Global share index closed at a record high, as did markets in the US, Japan and Korea.  

Investors in those countries are looking at the real issues, particularly recent profits and expected future profits. Equity market fundamentals are strong in many countries and sound in Australia.

Australian companies’ half yearly reports to December were mostly good, better than expected. The labour market remains fairly tight with unemployment normal. Consumer spending is still sound despite the cost-of-living-crisis.

Geopolitical crises and conflicts don’t usually have much effect on share markets. In fact many have seen markets gain, perhaps due to extra spending on military equipment.

Investors need to apply logic. Buy what appears to have a growing future and sell what doesn’t.

Interestingly, the various sectors of the Australian share market have performed very differently this year. For example technology company shares have fallen 19 per cent on average in 2026 while metals and mining company shares have risen 18 per cent.

Investors haven’t been panic selling but they have been moving away from areas they see as having less potential towards those they see as having better growth prospects. Such significant moves also create the opportunity to look for oversold companies.  

Investors who don’t wish to pick their own stocks can use funds run by professional managers who have shown an ability to make smart choices.

Ignore the headlines. Look for opportunities in all investment areas and move ahead as normal.