Investing decisions are often made on the basis of hearsay and gossip. One of the problems with hearsay and gossip is that it often goes through a process of distortion before it reaches our ears reducing it’s accuracy.
This is also true of the news in general and it also perfuses into investing as no exception. The premise of long-term investing is that things have got better societally and financially for the human race since the beginning of time. What this translates to is a steady increase in the value of the world’s stock market which generally outpaces inflation. This is one of the fundamental underpinnings of how growing our wealth is achieved.
The reality is that headlines such as “GLOBAL STOCK MARKET CAPITULATES” tends to sell papers. . Headlines such as: “Humanities’ collective prospects are improving incrementally year on year yielding improvements to our overall QOL and hence also the valuations of the companies that provide us with those products and services” are far less punchy (and too wordy) yet more accurate.
There are so many factors which make a good investment a good investment. Sometimes, even a good investment that is executed incorrectly can lose money. This is why the concept of “hot stocks” etc is so dangerous. The best way to success is via education.
I once met a financially literate journalist. He worked for a large paper. When there was a correction (temporary downturn) in the market naturally a headline would be expected from him. He would attempt to explain to his boss that fluctuations in value are to be expected. His boss had no interest in being educated and simply said “well FIND a reason in that case.” Being placed under such pressure to come up with something does not tend to yield accurate headlines.
In fact, did you know that the word NEWS can be interpreted as an acronym? It can stand for Negative Events Worldwide Service. This stands totally at odds with the general consensus that the world becomes a better place year on year.
The first question to ask oneself when one hears advice in any capacity is “has this person done their research?” and the second. question is “does this person’s agenda also align with my own?”
When one uses this filter, they tend to find that the number of news sources they deem as credible becomes very select…. and infinitely more valuable.
Long story short – the news is not the best place source of information to make our investment decisions. The ability to educate oneself is out there and the truth is more straightforward than one might think.