Share prices are an artificial creation and offer no real insight for investors who have been conditioned to react to irrelevant information, according to Investor's Mutual investment director Anton Tagliaferro.
Tagliaferro said the level of information reaching investors was mainly noise and focused on turnover instead of long-term performance.
"The level of information provided to investors has made them worse investors since they react to irrelevant information, such as shifts in daily share prices, instead of looking for the long-term strategies that determine performance," he said.
"The share price is a man-made creation and changes daily but real companies don't change their values and their strategies each day. Their value and performance is measured over the long term — and three-to-five year timeframes is where it matters."
Tagliaferro said that much of the uncertainty and confusion was created by equities markets where trading was carried out by people without an understanding of the underlying investments.
"Fifty per cent of Australian Stock Exchange-traded shares are traded by people or things that do not know what they are buying or selling, yet in many cases the savings of people are dependent on the outcomes of these trades," Tagliaferro said.
