Are Financial Headlines Designed to Scare?

Categories : Financial, News
January 18, 2023

Financial advisors get up every morning dreading reading the day’s financial headlines. If any significant portion of financial headlines were to actually come true, we would not have a country, much less an investment portfolio that actually rewards investors. Some days we just ignore headlines, and other times we get riled up by the attention-seeking “experts.”

Such a day happened last Monday, when on a single page of a commonly visited financial website, three consecutive headlines, each crafted to receive “clicks,” read:

  • “Banks Could Seize Your Accounts”
  • “The End of the Dollar”
  • “Stocks Risk 22% Slump”

Beginning a day like that is enough to send an otherwise sane investor into a tizzy. Multiply that by 100+ clients, and you get an idea how much more frustrating financial advising becomes. Fear is the enemy of advisors and clients alike. Overcoming fear is difficult enough without a daily gobsmacking in the media. Fear is overcome by education and knowledge. Our mission at Van Wie Financial is to counteract and overcome fear using knowledge and facts.

How much truth is behind these headlines? Can banks seize your funds? Yes, they can, if triggered by one of the rare elements in banking and tax laws. Don’t pay IRS, and they might freeze your account. If the bank goes under, Dodd-Frank allows the bank to use your funds while working out the bankruptcy. You get stock shares, and hope they become worth something. Choose your bank wisely, and be sure your deposits are insured. That’s on you.

Is the Dollar doomed? Will it be replaced by government-created crypto? If I said “No,” and someone else “Yes,” who would you believe? Imagine the complexity of a change of that magnitude, add in the number of politicians who would be bombarded with angry constituents, and draw a rational conclusion. Political suicide is shunned by Congress.

Do stocks risk a 22% slump today? Every single day of your life, stocks risk a 22% decline. Likewise, they risk a 22% spurt, and in actuality, even more.

Why is the media replete with such headlines? Could it be that the authors (read: advertisers) are selling something? Perhaps precious metals, newsletters, or annuities, there is always something they want you to buy, and they are willing to scare you into purchasing. Had you not read those headlines, would you be scared by highly improbable scenarios?

Van Wie Financial is fee-only. For a reason.