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The Mainstream Media Can Help Investors, but Not Always in the Ways You Might Think

Is the mainstream media a voice you can trust when it comes to helping you manage your wealth? While you may see some good articles on occasion, by and large the mainstream media is there to shock and awe! it's important to remember that the mainstream media's primary objective is to get viewers attention. In order to do that, it needs to utilize copy for headlines that will grab people's attention. It's only business one could say. Sure, but this business can have a significant impact on people's emotions and when it comes to making decisions about matters that impact your finances, emotions can and do play a significant role in peoples decision making.

A neutral headline rarely get's people's attention. When stocks drop or rise significantly, the headlines will capture the mood of "elation" or "depression". The "Sky is falling" is typically the mood when the stock market drops significantly or, alternatively, the mood of "Everyone is making money like it is growing on trees" prevails when the stock market is rising or company "x" is going to go up for ever.

The above is a common default position of the media and while the content will of course be different in every case, the emotion of "fear" or "greed" is underlying the content depending on whether the market or a company is going up or down.

To further complicate matters, the mainstream media is used by a variety of "influencers" or "experts" with different agendas. When BIG money is on the line, it is not uncommon for one expert from such and such investment bank or hedge fund to be talking down a stock while someone in the very same bank or hedge fund is buying it with everything they have. Conversely, the opposite can also be true, where an expert is touting the glories of a certain stock and someone in the backroom is selling the stock. These scenarios along with many others can and do happen.

So, what can you believe and how can this help you? If you take an interest in the markets and can maintain a steady level of objectivity then you can utilize the prevailing mood that is fuelled by the media and its underlying influencers to your advantage. As Baron Rothchild once said "Buy when there is blood in the streets". Of course that is easier said than done. The basic human emotion in such instances or times, is to flee, not buy! Now, in some instances fleeing is exactly what you should be doing, but in other instances where underlying economic indicators about future prospects suggest a more optimistic outlook than the media is portraying, it would provide a more objective basis to be buying.

The converse is also true. When the media, your postman and taxi driver are telling everyone they should be buying for surely there have never been better economic conditions for you to make a fortune with not a "bear" in sight, you may want to take a good hard look at the underlying economic conditions and valuations of companies in the market place to see whether this is a good time to be selling. Perhaps it is a good time to buy when this message is being touted universally, but it may also a good time to exercize caution and due dilligence.

So to conclude, the media can really help investors, but perhaps not in the way you were originally thinking. It takes time and knowledge to filter through all the signals given by the media whether it is about the markets or a particular stock. Scare and greed tactics are being used all the time as they reliably provoke an intended action.

If the above is not interesting to you or you do not have the time to do this, in addition to a hundred other complex variables you need to master, to manage your wealth, retirement and future legacy then it makes sense to look for a financial advisor who can help you objectively navigate the markets to achieve your financial objectives.

Our door is always open. Call or email us to set up a no obligation appointment to consider your investments and wealth management goals.

 

 

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1600 South Main Street, Suite 190
Walnut Creek, CA 94596
Phone: 925-906-9800
Fax: 925-906-9884
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Hawley Advisors is an investment advisor, registered with the State of California. Any investment ideas or strategies on this website are for the purposes of education and general information only and should not be construed as specific investment advice. For more information about our firm please check the SEC Public Disclosure website: https://www.adviserinfo.sec.gov/

 

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