For over a month, I have been exploring the multiple threats to a comfortable retirement. Whenever it seems like I must be nearing the end of the list, a few more pop up. It isn’t that these threats are something new; it simply means that they crossed my mind recently.
So it is with my topic today – the ubiquitous media, both financial and other. How and why are they threatening your retirement? Much of the misinformation is borne from ignorance. The average journalist today is an under-paid, post-college Millennial, who went into the business to “make a difference.” What kind of education, experience and objectivity could we reasonably expect from a person of these qualifications?
Well-intentioned, but underqualified, journalists will occasionally get something right, but the true activist journalists see things from a viewpoint they gained in liberal academia. How many of them know anything of substance about the business world? Untrue and/or slanted financial news can influence individual investors to become overly cautious, as was demonstrated in November, 2016. We were bombarded for weeks with gloom-and-doom predictions for the stock market, should Donald Trump win the election. He did win. What happened to the market?
The naysayers were absolutely right! But only for a few hours. As election results were becoming known, market futures entered a free-fall. Lots of money was lost. But before the U.S. market opened, something changed. Buyers stepped in, causing the futures to rise. Lots of money was made!
The change in the market is perhaps best illustrated by the DJIA having broken the 20,000 mark on January 25, 2017, after only a few days of the Trump presidency. Investors who paid too much attention to pre-election predictions were left out in the cold.
One of the greatest threats to your successful retirement would be to act on self-imposed fear, enhanced through exposure to media “experts.” Market performance lost to frightened investors during periods such as the early days of 2017 will be difficult to recover. This is not necessary, which is why we stated repeatedly on the Van Wie Financial Hour that we believed the best pre-election advice was to “stay the course.”
Bad market advice is often free of charge, and appears relentlessly throughout the media. There is very little we can do about the poor information, except to remain calm and rational. Long-term investing requires the ability to conquer fear, and to replace it with common sense and diligence.
One of the goals of the Van Wie Financial Hour is to keep you educated and informed about the dangers that lurk in the information-saturated media. We strive to be objective, and consistent, in the pursuit of financial independence for all who strive to achieve that goal.
In coming weeks, we will further explore various other threats to your financial success. Knowledge truly is power.