Are You Watching Financial Pornography?
Thank you to Jay Mooreland for his presentation today at @FPAHouston!
Our job as financial planners is not just to watch your money and help you achieve your life and financial goals, but also to help educate and coach you to be able to filter information that you are bombarded with on a daily basis and to focus on the right things and to filter out the rest as noise.
Jay brought up a great point that financial media can be compared to financial pornography. After the laughter died down, we dug into what that really means. Any time you turn on the financial news networks you are blasted with predictions, short-term outcomes, stock prices and headline news to get you hooked. This gives the illusion of certainty, control and taps into your emotions to keep you coming back for more. Whatever feeling you want to get, just change the channel you’re sure to find one that suits your mood.
We then explored questions of what really is the motive of financial media?
1) Sell Ads to make money
2) Tap into your emotions to get you hooked to view their ads
3) Keep you informed of the daily “news”
…and probably in that order of priority.
We caution our clients that listening to this noise daily can be harmful on achieving their long-term goals as the information presented is only as good as the day it came out and then tomorrow there will be another headline to fuss over once today is gone.
Emotion can be highly contributed to why the average equity investor actually returns only a fraction of market return. If the market is making you uncomfortable or is highly stressful to you right now, I offer that you speak with us in regard to your situation as it is very likely that your financial plan may be in misalignment with your objectives.
