Earlier this year, I listened to a podcast that discussed the need for a healthy dose of discernment. Ever since, I have kept that term top of mind and continually work on refining it. What exactly is discernment?

Discernment’s dictionary definition is simple: the ability to judge well

A more extensive explanation of the term (thanks AI) is:

the ability to judge, understand, and perceive things clearly, especially those that are not hidden or not obvious, by distinguishing between different aspects and making intelligent, accurate judgments. It involves a deep and thoughtful process of sifting through details, assessing situations, and recognizing underlying truths to arrive at a wise decision or understanding.

I’ve been thinking more and more about this skillset as 2025 has progressed, and this week brought it back to top of mind. I consume a meaningful amount of news and data – both for my professional role and my personal desire to stay informed. If you do the same, you may also notice that depending on the source/news organization, the same story and set of facts can be presented from a completely different perspective. Anyone with an authoritative voice and a position of power can be viewed as a subject matter expert. Social media especially is fraught with conflicting views and advice – much of it being given by those with conflicts of interest (an example: influencers giving medical advice that sell the very supplements they are promoting).

As it specifically relates to the investing world, there is no shortage of opinions and predictions. Within a few hours of broadcasting on CNBC this week, one guest said mortgage rates would fall, one said they would spike, and another reported that new home sales rose 20% in August (a three year high). Yet another tweeted a new stock idea (that they also owned) and within three days, the stock (and this man’s position value) had doubled.

I’m sure you can rattle off several experiences you have had this week with media as well. Our minds are being bombarded by news, data, and messaging constantly – some helpful, some harmful, and some conflicted.

Two things that help me:

Control your inputs – While it may not feel like it, you are in control of what you consume. Take stock of where you are sourcing your information from and ensure you are comfortable with the parties providing you news and advice. I personally have stopped following certain individuals on social media and have stopped listening to certain podcasts. It’s amazing what removing challenging inputs can do to your mental well-being! Your time and mental energy are valuable resources – don’t give them away so easily!

Discernment – no surprise here (based on title of this article) but this is perhaps the best defense. It may not be possible for you to “turn off” all news sources if you want to stay informed and aware of what’s happening in the world around you. This is where discernment comes in.

What does this look like? Let’s speak specifically to investing. It looks like stepping away from the daily news flow and formulating an investment plan that is designed for you and your goals. You establish target asset class weights that will allow you to reach your required return objective. You set guardrails, including maximums variance from these targets and maximum weights for individual positions. You decide whose opinion you will listen to and what data is helpful to you. You know what you own and why you own it. You remind yourself that you don’t need to participate in every “hot idea.” You establish a team of trusted advisors to help. With all of this pre-work in place, you can hopefully filter and judge data that bombards you each day.

What will happen as a result of this forethought? You will have a higher level of discernment moving forward. You can judge the inputs more easily. In action, here’s some examples – You will resist the temptation to act on an investment idea spouted off by a TV commentator (likely full of conflicts). You won’t adjust your approach based on one day of market action. You won’t be as emotionally impacted by opinions presented each minute/hour on business news. You won’t feel bad about your financial journey based on what someone tells you about theirs on instagram or at a dinner party. You will be confident in how you’re investing. You will stay in your lane.

Discernment is a skill. I continue to work on it. Perhaps you’ll do the same.

Onward we go,