Reading the Morning Financial Headlines like a Financial Advisor

Let’s visit a single day’s worth of morning financial headlines – through the lens of good financial advisor.

Before I dive into the content for this month’s post, I think an important disclaimer here is that I don’t often read the daily financial headlines. In fact, I try to avoid them. I don’t watch CNBC, Fox Business, or Bloomberg. I don’t pay too much attention to what the market is doing on any given day, because I’m far more concerned with what my clients are doing to make the best possible decisions they can for their financial situation. And it turns out, the morning financial headlines, the market forecasts, and what the market did today have literally no bearing on how my clients or I should be making our financial decisions. They simply don’t matter.

But every now and then, when I find myself perusing the morning news for something else, I am struck by the bombardment of financial headlines. And to help you be a better consumer of these headlines that compete for your attention and emotional bandwidth each day, I thought it might be interesting to do a walk down a single day’s worth of morning financial headlines, seen through the lens of good financial advisor.

So, one morning (in early November of 2022), I took to the internet and took a screen shot of the first 10 financial headlines that I found in the Google News section. And then I jotted down the thoughts that went through my head as I read each one of them. And in a bit of a non-conventional blog-post, I’d now like to demonstrate how I read the morning financial headlines, on the rare occasion that I read them at all.

Headline 1:

Stock Market Outlook: S&P 500 to fall 16%, UBS says

16% is an oddly specific number. How could you possibly predict that? And over what timeline? And if it falls 18% will this prediction be considered correct? WHY would you put something like this out there when everyone knows you can’t predict what the stock market will do? And 16% — really. Weirdly specific.

And the certainty of that language “to fall” is wildly misleading. As if there were any way we could know that for sure.

Headline 2:

Stocks are trading exactly where they were 5 months ago, which could mean they’re poised for more gains, one analyst says

Dramatic twist. Looks like not everyone agrees with UBS. The plot thickens.

Headline 3:

A fund manager with 50 years’ experience is beating the S&P 500 this year. How he did it and the stocks he’s watching

Nobody cares. Since 95% of fund managers can’t beat the S&P 500 over time, it really doesn’t matter what they do in a year’s time – this is absolutely meaningless garbage. I hope no one runs out and puts their money in this fund. If he beat the S&P 500 this year, that ship has probably already sailed, and most likely he won’t do it again next year.

Headline 4:

S&P 500 could plunge another 30%, US faces historic recession

Take that UBS. This guy doubled down on your 16% prediction. His crystal ball foresees nearly twice as much loss. Words like plunge and historic make this one sound particularly scary.

Headline 5:

S&P 500 typically gains big in year after midterms, even when there’s a recession

We’re bordering on meaningless (let’s be honest we’re well past it) at this point. Four of the first five headlines are just making competing market predictions, half for the market doing better, and half for the market doing worse.

Headline 6:

Midterm Seasonality: Is there a 100% chance of a higher S&P 500 in 3 months’ time?

100% chance? No, of course not. There’s never a 100% chance of anything in the market (or in life). What a click-bait headline.

Headline 7:

Elon Musk would have this much cash if he sold all his Tesla stock

Oh, who actually cares? This is not news. It does not belong in the news section. Well, actually, none of this is news, but this is bordering on Real Housewives of Finance territory.

Headline 8:

Everything has a season, even stocks. Why now could be the right time to buy

This is the third headline I’ve read with the word “could” in it. Just to make sure we don’t take these crystal ball predictions too seriously and nobody gets sued when they turn out to be wrong. Which obviously at least half of them will.

Headline 9:

S&P 500 earnings estimates for 2023 take a ‘complete U-turn’ as recession risks loom, according to BofA

Ooooh. This typically means they made a prediction a few weeks or months ago that they’d now like to reverse. And even though that one was wrong, they’d like us to believe this one. This one is definitely better.

Headline 10:

The S&P 500 is mounting a comeback, and these stocks are ahead of the curve

Is it? This is news to me. I wonder what we’re supposed to do with this list of stocks? If they’re ahead of the curve on the comeback, that probably means we shouldn’t buy them, because they’ve already recovered more of their losses than some other ones that are still searching for rock bottom. But I bet the article won’t say that.

I can’t say that I read the last article to confirm whether it said that or not. I didn’t read any of them. Giving financial advice based on this would be highly irresponsible. Financial decisions (including investment decisions) should be made based on financial goals not click-bait financial headlines.

What I can say, though, is that it’s best to take headlines like this (if you have to read them at all) with an enormous grain of salt. Bring some awareness to your emotions. If you let one headline swing your brain around to convince you that doomsday is near, make sure to keep reading to find the dramatic conflict of the next headline that will tell you the market is poised for a rebound. If you’re wondering who to believe? Don’t. Neither is worth paying attention to. Smart financial decisions aren’t market driven, they are goal and timeline driven. They are personal. They involve things you can control – like how much you spend, save, and invest over time. There’s not a single thing in the headlines above that should even make you consider changing your investment strategy.

So, if you find yourself subjected to these headlines in a way that is out of your control, like on your search engine page, your radio, or an airport TV, remember to take them with levity. I know, it’s not easy when it comes to investments. But if you let them incite the emotion that they are designed to, you’re letting something that doesn’t matter get the best of you. Because no matter which of the headlines above prove to be true, it shouldn’t change the best course of action for your personal financial decision-making.

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