Nancy Graham November 13, 2019 Personal Wealth Good News? Bad News? No News Is Best When You Go To Invest Okay, today, I’m taking on a subject I’ve been dancing around for a while. This is one two-step I’m tired of! So let me tell it to you straight: Most of the financial media is out to get you. Their goal is to lure you into staying tuned to their channel, website, or whatever … all day, every day. And they know just how to do it. They bait their trap with an endless stream of BREAKING NEWS. Breaking News Can Break Your Resolve The problem is, your best interests as an investor have nothing to do with theirs. In fact, your priorities are usually exactly the opposite. And therein lies a problem. Believe me, I know exactly what it feels like when you see scary or exciting breaking financial news. Hey, I’m human too. Just like you, my deep-down brain reacts to certain cues every time. Exciting or alarming headlines can suddenly seem super important, even when my higher brain knows better. The best investors, like billionaire Warren Buffett, know that fear and greed are the enemy. Success comes from keeping your rational resolve across all the crazy news cycles. I’ve covered this before. It starts with having a disciplined financial and investment plan in place. Then you stay in your seat through thick and thin. When investing, this is the best way to get where you’d really like to go. It’s too bad the popular financial press is always trying to unseat you! They play all sorts of tricks on your animal brain, distracting you with hot cannabis stocks, or tempting you to flee any fall-out from the latest trade war. Before you know it, you’re wondering whether you should ditch your broadly diversified portfolio to chase after the latest, supposedly greatest news. Whenever you’re tempted to react, please remember: The popular press measures its success by how many clicks they score, how much buzz they build, and how many ads they sell. Never mind that their tactics are not even remotely good for you. Seeing Red Think I’m overstating things? Here’s a case in point: A group of academics recently published a paper on how seeing the color red influences investor behavior. In a series of experiments, some participants were shown negative financial data in red, while others saw the exact same data in black. Believe it or not, those who viewed the same data in red became significantly less risk-tolerant and more pessimistic about future stock prices. Only two groups remained unaffected by the color difference: People who were color blind, and people who came from cultures like China, where red is a symbol of prosperity. That tells us something about our brains, don’t you think? The problem is, the popular press is way ahead of us on these kinds of parlor tricks. It’s no wonder their headlines are often embedded in a backsplash of deep, dark attention-grabbing RED. Looking Past the Headlines This is just one trick the popular press uses to get us to swallow everything they feed us. The good news is, if you know what’s going on, you’re far less likely to take the bait, or make the damaging decisions that often result if you do. Stick to your best-laid investment plans, despite the constant distractions. All this said, not every member of the financial press is out to get you. For example, consider that study I just described about the color red. I first came across it in a personal finance column by The Wall Street Journal’s Jason Zweig. Differentiating a Journalist from a Joker The trick for investors is to recognize the dramatic difference between all the nonsense out there versus the reputable journalists like Zweig or, here in Canada, Rob Carrick of The Globe and Mail. And let’s not forget our own “Couch Potato” journalist Dan Bortolotti. How do you tell the difference? Here are four questions to ask yourself: Is this news playing on my emotions? Does the spokesperson seem excited or worked up themselves? Are they insisting on urgent action, or else? Is the coverage cursory or deep? Is it delivered as a never-ending spew? Or do they post periodically, thoughtfully, when they have something worthy to say? Does the journalist cite rigorous, peer-reviewed data? Or are they focused on grabbing a few soundbites from a fast-talking head? Is the journalist’s personal mission based on advancing your financial wellbeing? Does it say so in their bio? Or are they more about becoming famous by generating junky click-bait? News That Enlightens Okay, enough said for now. To end on a high note, I love how Carrick described his calling as a financial journalist. In his bio, he describes how he’s seen just about everything the market has to throw our way, including “an ever-present worry that Canadians aren’t saving enough for retirement.” That’s important. He continues: “I know there’s infinite personal finance content available these days online, in print and on TV and radio. Come to me for my experience, my willingness to challenge stale consensus thinking and, most of all, my ability to make you say after finishing one of my columns: ‘Now I understand.’” Now that’s financial news worth considering. It’s not breaking news. But if what I’ve just covered is news to you, it’s stuff you need to hear to achieve your personal financial goals – on time, and as planned. See you again soon! Share: Facebook Twitter LinkedIn Email CIRO Advisor Report
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