Shares of Challenger Ltd (ASX: CGF), Australia’s leading annuities provider, are soaring 4.86% higher today following an ASX update this morning.

Source: Google Finance

Source: Google Finance

In an announcement to the ASX, Challenger said it is in compliance with ASX Listing Rule 3.1. Loosely the rule says every company listed on the market must immediately inform investors of any news that would make a meaningful difference to its share price.

As can be seen above, until yesterday Challenger’s share price had fallen sharply since the New Year. The falling share price would’ve left some investors scratching their head asking, “Hmmm, I wonder if there’s something I don’t know?”

Fortunately, based on this morning’s share price movement, Challenger’s attempt to reassure investors may have worked.

In addition to confirming compliance with the ASX-listing rules, Challenger reaffirmed profit guidance for its half year.

“Challenger will release its financial report to the market for the half year ending 31 December 2015 (1H16) on 16 February 2016,” the company said.

Foolish takeaway

Markets will often price a company’s shares irrationally. Indeed, small price movements can snowball into meaningful changes in share prices as investors grow nervous by the falls and panic sell because there may be “something I don’t know”.

While risks are always evident, and informed investors may indeed be selling for a worthy reason, it’s important to remember why you bought the company’s shares and base your trading (buy or sell) decisions on facts – not market ‘noise’.

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Motley Fool writer/analyst Owen Raszkiewicz does not have a financial interest in any company mentioned. Owen welcomes -- and encourages -- your feedback on Google+, LinkedIn or you can follow him on Twitter @ASXinvest.

Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.