man with binoculars and sign saying big news While bold or provocative headlines are at times informative, there are at least two main caveats that investors must be aware of. (Photo: Shutterstock)

Every day, we see a blizzard of headlines in the media or on the internet regarding the state of the markets and the economy, usually driven by a recent report, blog, tweet or forecast.

While these headlines are at times informative, there are at least two main caveats that investors must be aware of:  a) headlines may reflect a “bandwagon” mentality (i.e., the headlines follow or exaggerate what has been said by others);  and b) headlines often reflect only the average measures of what may be happening overall and do not reflect the significant variation among people or groups which are behind the statistics.

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