In Minnesota, like other large metropolitan areas, the financial media is everywhere. The popularity of financial media is largely due to the fact that so many companies have figured out so many ways to keep individual investors engaged in economic and financial matters.
Television, internet, smart phones, e-mails, and text message all can provide you more financial media than you can possibly have time to process and understand.
Individual investors need to be very careful in how they use what they see and hear in the financial media. I always explain to my individual company 401(k) retirement plan advice clients that the best way to think about financial media is that it is like watching a sporting event on TV.
With the 2012 London Olympics starting tomorrow, this is a great time to compare the financial media to the world’s most watched sporting event.
The media makes the Olympics a “must see” event every four years. Most of the viewers of the Olympic events only watch that sport during the Olympic years.
The content of what the commentators say is not very insightful. The commentary rarely adds to your understanding of the event. The vast majority of people that watch any amount of Olympic television do so just to see what all the world’s excitement is about.
The task of the financial media in the U.S. is much more difficult.
The talking heads in financial media have to make every single economic, stock market, and company event the most important news possible each and every day. The majority of the content of financial media is intended to “set you up” to watch or read more financial media the next hour, the next day, and beyond!
The financial media will always focus on what is going on every business day as the most important economic and investment events of your lifetime. Their commentary predicts past events with 100% accuracy.
When economic and business news is good, it is always a great time to be 100% invested. When the exact opposite set of events is true, you should have sold everything you own in the stock market a few days before.
Watching and reading anything in the financial media never makes you a more intelligent investor. Or a better manager of your company 401(k) retirement plan account.
So for the next few days, enjoy your Olympic events. But don’t expect to remember what you learn four years from now.
Ric Lager
Lager & Company, Inc.
