If you decide to invest in the stock market or any other financial product, the first step you should take is to find accurate information that will help you improve your investment or financial goal. When you follow financial news, you are a viewer, not a participant, and the content may or may not apply to your specific situation. The goal of the news providers is to keep you watching or clicking, not to offer you specific and sound advice directed to your unique circumstance. Media outlets know that engaging the viewer at an emotional level keeps their interest longer. Unfortunately, making investments in an emotional way tends to yield very poor results. Keep reading to learn why you should use caution when consuming financial news.
It Incites Unnecessary Fear
You've probably heard the phrase "if it bleeds, it leads." When we are afraid, we seek solace from “experts” in the industry who can soothe our anxieties and advise us on what to do. Networks are fully aware of this, and they understand that the more terrified potential viewers might be, the more they will listen. They have no motivation to tell the truth, comfort viewers that everything will be OK in the end, or present a fair assessment of what is going on. They are merely there to entice more people to watch and raise ratings.
The Financial Future Can’t Be Predicted
Many investors pay attention to the news because they believe it will provide them with a look into the future. How will the markets appear in the next week? How will our country's political chaos affect our stocks? Nevertheless, no one, including financial analysts, can forecast the short-term movement of the markets. The best thing we can do as investors (and advisors) is to focus on the here and now while preparing for the upcoming future. We can only control so many things in an uncertain world and you will want to retire one day regardless of todays news. Our actions over time tend to be the determining factor in achieving financial success, not the short-term news cycle.
It Heightens Emotions
Did you know that the majority of individuals underperform with investments because they make hasty judgments to abandon investments or make other rash decisions? When you watch the news, it's easy to become emotionally involved in what's going on in the country and markets. In reality, that is exactly what the stations desire. If you are inclined to make judgments based on fear or concern, a short-term occurrence may cause you to abandon an investment that would have been beneficial to your long-term goal. When you remove the emotional time bomb of financial news, it is much simpler to commit to a long-term strategy with your financial advisor. When you turn off the financial news, you may devote more time to more rewarding things, such as reading books, listening to podcasts, or spending more time on hobbies or with family. You may also eliminate a great deal of unneeded tension and anxiety from your life.
It Can Cloud Judgement
Whenever you plan to start investing money, many look to financial news sources to make a determination of their next move. You will soon find the market is volatile and the so-called experts don’t really know what is on the short-term horizon. An investor can end up in a decision-making paralysis, waiting until there is clarity on their next move. Every day that is spent in this state is one more day that you are not actively moving towards your financial success. If you are a long-term investor, history shows the best time to get involved in the markets is simply when you have money.
It Can Cause Confusion
It can be important to seek expert advice when making investment decisions. It can be very confusing to watch experts in the media arguing amongst themselves over the correct path to take. How can two experts have such disagreement? The reality is that these mass media experts do not know you and your situation. A relationship with a personal financial advisor is different. Your financial advisor will learn about you and your goals and develop strategies tailored to you. Your advisor should counsel you on the reasons behind the recommendations so that you are satisfied with the soundness of your plan. The value of working with an advisor is not that they are clairvoyant to the directions of the market but in the building of a disciplined plan.
Schedule A Consultation with an Experienced Financial Advisor
Here at Fourth Avenue Financial, our first priority is your overall financial success. We want to help you develop, implement, and monitor a strategy designed to address your individual situation to ensure all your investments are setting you up for a path of financial success. If you are ready to start planning for your financial future, we are here to help. Contact us today at (304) 746 7977 to schedule a meeting with one of our experienced financial advisors or schedule online: https://calendly.com/fourthavenuefinancial/introductory-zoom.
Securities are offered through J.W. Cole Financial, Inc. (JWC) Member FINRA / SIPC. Advisory Services are offered through J.W. Cole Advisors, Inc. (JWCA). Fourth Avenue Financial and JWC/ JWCA are unaffiliated entities.