Mind Games: Back to School
As students return to school, it’s an opportune time to reemphasize a critical lesson for investors: the value of being mindful when consuming financial news.
The financial media often presents itself as a trustworthy source of information, but it can be a trap that leads investors astray. Instead of providing straightforward news, these outlets often use sensational tactics to trigger emotional responses, potentially derailing investors from their financial plans. Tuning out this constant media stream may be a challenge, but it can greatly benefit any investor.
In August, the media capitalized on some market ups and downs, framing it as “Market Turmoil” and inundating us with their advertisements, as if these daily fluctuations threatened our financial security. What’s astonishing is that this happened when the markets were just 5% away from their all-time highs. One can only wonder how they will react during a more extended market downturn.
This is an important reminder that the financial media doesn’t necessarily help us make good decisions; it’s more about keeping us emotionally engaged because that’s how they stay in business. This stands in contrast to our financial plans, which are designed to help us reach our individual financial goals. So, which should we rely on?
It might be tempting to pay heed to the media, but doing so can be detrimental. When we need reassurance, it might not be easy, but it’s in our best financial interest to let our financial plan guide our decisions, rather than the media’s sensationalism.
By Anthony C. Williams, CWS, ChFC, MRFC, CLU | Investment Advisor Representative | President & Founding Partner of Mosaic Financial Associates & Orthopaedist Advisory Group | Securities and advisory services offered through Cetera Advisors LLC, Member FINRA/SIPC, a broker/dealer and a Registered Investment Advisor. Cetera is under separate ownership from any other named entity.
© The Behavioral Finance Network