Bad things tend to happen to family wealth when individuals read, watch, or listen to too much news. It’s natural to react to a flood of information with fear, excitement, or confusion. These reactions can lead to harmful and counterprodutive actions: e.g. buying high and selling low.
Sure, the media is partially to blame because they know what attracts our attention. They know that dry, sensible content would be better for successful investing; but many members of the press choose to appeal to our doom-scrolling inclinations, and prioritize click rates over a commitment to facts.
Who is “the media”? Not every member of the financial press is the same. How do you identify who within the financial press is worth following?
There are three broad types of financial news:
- Market Reports: Raw information being delivered 24 hours/day around the globe. Including stock prices, and breaking local, regional, and global events.
- Market Commentary: Talking heads eager to share their opinions/analysis of this raw information.
- Financial Columnists: Many media outlets also hire personal financial columnists to publish deeper, more thoughtful reflections on topics of interest to investors.
None of these categories is inherently good or bad. A regular flow of publicly available information and analyses creates more transparent market price-setting. This steady stream of news improves market efficiciency. That’s good news for all investors.
The trouble begins when you assume this same outpouring of information can help you predict future pricing. Despite all the opinions and play-by-play predictions, nobody actually knows which combinations of news will cause what stocks or markets to rise or fall, or when. This means, nobody can provide you with actionable, trade-worthy insights that will enhance an already well-built portfolio, allocated and balanced according to your personal financial goals. Anyone claiming otherwise is looking out for their financial interests, not yours.
Can the personal financial columnists add value to your investment experience?
You’ll find subtypes within this category as well, with some columnists mixing and matching one or more of the following roles within their work:
- Watchdogs: These financial journalists serve as the media’s traditional “fourth estate,” seeking to hold governments, businesses, and individuals accountable for their actions.
- Advice Columnists: Like the Ann Landers of the financial new, responding to readers’ queries about finance and investing.
- Outside Influencers: Som have primary careers outside of the media, offering their thoughts as subject matter experts, real or perceived.
A dutiful watchdog can uncover real problems that deserve to be exposed. A self-serving reporter may be more interested in creating flurry of attention grabbing content, hoping to further their own career. Advice columnists can offer objective advice, or they can perpetuate misguided myths. Some outside influencers provide well-informed insights within their specialized fields. Others are disguising sales pitches.
Ultimately, among the financial press, you’ll find lots of noise, some common sense, and small pockets of reason that ring true. We are here to offer clarity as you sift through and decide which content is best consumed, or ignored.