Netflix stock soars over 150%!!
Chinese Stock Market is crashing!!
Bio-techs up 250%!!
Interest rates will rise!!
Sell your airline stocks!!
Will Greece default?!
I hear these over-excited, panic inducing headlines thrown around by financial analyst/new anchors daily. Think about this though, if you had to talk 24/7 would everything you say matter? No, of course it wouldn’t! Media personalities do not have your interests, risk tolerance, or financial goals in mind when they are pitching stocks in 45 second intervals. That’s why they run 2 minute disclosures at the beginning and end of every show.
I work in the investment industry on the side that does have your interests, risk tolerance, and financial goals in mind. I am aware of the media’s pressure on the average person tuning into a news channel and watch professional investors struggle daily with the advice that is given. But, I still find myself sucked into the psychological pull of the financial media circus.
I catch myself wondering why I don’t own more of Netflix. Why is my portfolio not up as much as the S&P 500? Should I adjust my 401(k)? I have to frequently remind myself that media is entertainment. It’s inherently flawed and will always skew towards higher ratings and flashy stories, rather than build investment knowledge that might actually benefit viewers long-term. The constant media exposure creates a feedback loop where your self-worth is characterized and valued by what your neighbor has.
If Bob has a new plane, I need one too. Bob bought more Netflix. What does Bob know that I don’t know?! As soon as you start looking at Bob and not yourself, you under appreciate what you have, you covet what Bob has, and you buy and do things you DON’T NEED!
Investing for your future is challenging. You do not need added psychological stress, self-doubt, and wasted time by indulging in what Mad Money Kramer says. Keep your head down and focus on your financial goals with a strategy that fits your personality. You could spend an extra 20-30 hours a week on top of your regular job obsessing about which analyst said to buy what stock and maybe earn an extra 5 percent on your portfolio; or, you can turn off the TV and spend your time with friends and family, discovering a new Indian restaurant, or hiking to a secret waterfall.
I am going for the waterfall.
Remember to focus on your financial goals. Investing is a long-term challenge that will not be won with the latest high-flying stock on TV.
Feel free to contact me with questions! I’m always excited to meet new people and help them learn what they are struggling with. If you’re interested here is my recommended reading until next time: The Power of Habit by Charles Duhigg.
samissermoyer 