Why It's Time to Turn off the Financial News
Turning off all the financial news on my office TV helped me make better financial management decisions. I encourage you to do exactly the same thing.
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The financial media has a few perils you need to be aware of. Let's be honest—financial media exists to make money. They claim that their value is informing investors and their knowledge can lead to money and power.
However, you have to ask yourself what they're really informing us of.
I recently read an article from a major financial publication that said: "DOW suffers the longest losing streak since 2011." It would be funnier if it wasn't so sad because the publication was actually serious about the article. The headline was attention-grabbing by tapping emotions like fear and anxiety. The media's job is to tap into these kinds of emotions because that's what gets our attention.
Media revenue comes from viewership, not helping us make better financial decisions.
So what if this same article from the same publication had the headline "DOW down 1.9% over the past two weeks?" It would be ridiculous because nobody would care. And yet, that's exactly what happened over the time frame that this article referred to. Yes, the DOW went down eight days in the row, but the cumulative effect was so minimal that it could have easily happened in one or two days of trading.
Ignoring the financial media is one of the best recommendations I can give a client.
During 2008 and 2009 in one of the worst financial crises in 100 years, I remember watching all the news channels from CNBC to Fox News to CNN. All the talking heads and naysayers started to depress me to the point of affecting how well I managed money. Finally, I just had to turn the TV in my office off and listen to what the market told me. If you tune the news out and listen to what the market is telling you, you'll make much better decisions. The market tells us something every day, but are you actually listening?
Anyone who read that article would have realized that the headline was a joke and a space-filler; in my opinion, there was nothing newsworthy there. Someone who only reads headlines might make a hasty decision just based on that article. They might even start to worry about their finances unnecessarily.
To improve our decision making, we need to ask how this is relevant to us. How will it affect your portfolio? Will it even matter to you two weeks, two months, or two years from now? If we ask ourselves better questions, we'll get better answers. Ignoring the financial media is one of the best recommendations I can give a client. So remember, if you have a plan, stick to it and stay the course.
If you have any questions about this topic or any other financial matters, you can always give me a call or send me an email. I'd love to talk with you.
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