Is the Media Detrimental to Your Returns?

I just recently read an article by the president of Sabela Capital Markets in Advisor Perspectives magazine. The title was “The Financial News Media Is Detrimental to Your Returns” dated 4/30/2019. The basic gist of the article was that professional investment firms do not concern themselves with the latest person in front of the camera on CNBC or Bloomberg’s or Fox Business. Financial media is about entertainment. They are looking for eyeballs on the screen not dollars in your bank account.

I sat for a minute and pondered this….. you see, that has been my premise for years. If you took a score card and tallied up one day’s programming it would look like this: invest in gold, don’t invest in gold, the market is going up 20%, the market is going down 50%, stay away from international, load the boat on emerging market stocks, and so on. It would be literally impossible to follow all the advice given.

The problem they have is investing at its core is boring. Investing is the art of relative valuation. The keys are diversification and being unemotional. You can’t fill 18 hours of programming with that. To get the eyeballs you have to tell people the market is soaring or there is wide spread panic. They need you to be emotional.

The mantra we all know is buy low, sell high. Easy, right? The reality is buying low means risking your hard earned dollars when everyone is leaving the party by the nearest exit. Selling high means jumping out. It’s selling when everyone including your butcher is telling you the next hot stock to buy.

Be your own person and resist the urge to follow the crowd. Stick to the basics.

Any opinions are those of Tim Holcombe and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. This material is provided for educational purposes only and does not constitute investment advice. The information presented does not purport to be a complete description of the securities, markets, or developments referred to in this material. Diversification does not ensure a profit or guarantee against a loss. Holding investments for the long term does not ensure a profitable outcome. Investing involves risk regardless of strategy selected. Prior to making an investment decision, please consult with your financial advisor about your individual situation.