Ep #77: How To Digest Sensationalized Financial Media Headlines
- Permission to be emotional (3:12)
- Being skeptical (3:48)
- "The Economists" (4:30)
- Want to be "in the know" (8:34)
- Your plan (10:40)
- Moment in time (12:00)
- Summary comment (13:30)
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Full Transcript:
Benjamin Haas 00:00
Money. Money is the tool that's going to get you to where you want to get to in life, to focus on what matters most to you. To see that and feel that kind of shifting, like dollars lost on a statement. News is telling you markets are going down. This is so very natural and human to boil up with emotion and go, oh my gosh, do I need to be doing something different? What are we doing about this? This is what I'm hearing, is this true? Hi everyone, and welcome to A/B Conversations where we will help you CFP your way out of it. A podcast where you get into the minds of a couple Certified Financial Planners on how we think and feel about everyday financial planning questions and what should really matter most to you. A healthier financial life starts...now!
Adam Werner 00:50
Hey Ben, welcome back podcast Friday.
Benjamin Haas 00:54
Let's jump right in and excited to get through this one, I think it's very timely.
Adam Werner 01:01
Very. So as most people are probably aware at this point that are listening, we are officially in a bear market. It's all over every piece of news that you could read, see, or hear out there. That's going to be our focus today, just the media, how some sensationalism grabs eyeballs and it elicits certain responses that may not necessarily be the most comfortable for people to kind of see and feel. Our role in that process for them, we want to help be a filter to try to figure out what's actually important to them and their situation, rather than just reacting to a piece of information that they see or hear on the internet or on the news station.
Benjamin Haas 01:52
Why are we here? We're here to really help people through the tougher parts of life to stay focused on what they need to stay focused on. I think this period of time, much like it was in 2020 and 2018 here two years before that. These are really emotional times and if we are honest about how we absorb information, even if you're not seeking it out, the media does a really good job of playing with our emotions and I'm going to use the word manipulating us. That's not to say what is going on right now is something that we shouldn't care about or shouldn't pay attention to. But our job and what we want to talk about today is the way that we can be here to help people filter some of that out. The questions they can really ask themselves before they read something or while they're reading something, or the things that they can try to put in perspective as they go about saying, "Does this matter to me or does it not?"
Adam Werner 02:49
Yeah, and I feel extremely qualified to talk about this subject just because I am a cynic at heart. When it comes to anything, I'm always thinking, hmm, really? So, when it comes to news headlines, the clickbait titles of certain articles, just things like that, it always, I think we've had this conversation, but it just makes my blood boil to see some of these things that get put out there, the things that clients share with us and it just it irks me to no end.
Benjamin Haas 03:27
To all our listeners, right? Permission to be emotional. It's human, right? I think anytime we're talking about money, money is the tool that's going to get you to where you want to get to in life to focus on what matters most to you. To see that and feel that kind of shifting, like dollars lost on a statement. News telling you markets are going down. This is so very natural and human to boil up with emotion and go, oh my gosh, do I need to be doing something different? What are we doing about this? This is what I'm hearing, is this true? Let's just start right there. Anytime there's a piece of news out there. I think it's really important to go well, why was this written? Right? So the first thing for me, you being a great cynic, you can have this list? Is this somebody's opinion? Is it somebody's perspective? Are they making some sort of project prediction or projection or are they stating facts?
Adam Werner 04:25
Yeah, that's a good first list of questions because obviously, anything leading up to if it's not necessarily a fact, then I immediately think, what's in it for this person. Who are they speaking to? Is it just a broad audience? Does it matter if they're making this prediction, as you said, that's what popped into my head. Oftentimes, there's a joke, there's a saying for us, I don't know who it applies to but the "economists" (I'm using air quotes around economists) have predicted 20 of the last two recessions. You can call for the end of the world from a financial standpoint, as many times as you want. You only need to get that right once for now your name to be in print and say this person predicted this but all the times that they were potentially wrong doesn't matter.
Benjamin Haas 05:13
Yeah, and it's not, I'm hopeful that this is helping people kind of frame before you go into that mode of does this matter to me it is to frame it up and recognize Yeah. Is this clickbait? Are they putting things out for ratings, promoting something that's underlying? Is this an ad to get you to do something different? A lot of what information is supposed to do is elicit some sort of response. Usually a negative one, to be honest and studies will show that. You know how people then interact with that information is what's going to drive something else to happen, so we have to be careful about that.
Adam Werner 05:52
I'll throw this out there just to piggyback on that. It didn't necessarily surprise me but it was still just eye opening completely. I'm going back a couple of years, there was the study, I think it was Facebook, the news came out that they shared negative posts or things that elicit either anger or just a negative, upset emotion in people. That's what got the most engagement. That's what people interacted with on social media. So those items are what got in the algorithm in front of your social media feed and I think just generally, the news is no different at this point where just those items that elicit a strong emotion, it grabs your attention. And ultimately, that's the media's role is hopefully number one, to just share information, right, share facts and then let us try to figure out what does that mean for us. But oftentimes, there is certainly ulterior motives that as many eyeballs as we can get, it doesn't matter what we're saying, as long as we can sell advertising dollars. Again, this is me being a cynic. That is their business model. That's how they make money.
Benjamin Haas 07:01
Can you, I don't remember reading this but I know that you shared it with me so I'm going to put you on the spot. You saw some sort of study on the usage of the words like breaking news, or
Adam Werner 07:11
Oh, yeah.
Benjamin Haas 07:13
Can you share that? I'm not remembering the details.
Adam Werner 07:16
I don't know the exact - there was, I'm not sure who put it out. But they were looking at CNN in particular, using the breaking news, you know, the red box at the bottom and it was just tracking how many times that was used over the last couple of years and it was some astronomical number they were pinpointing. There was like screenshots of certain news alerts that had the breaking news context or the breaking news kind of alert with it. That number one, may not even have been breaking news and number two, weren't even remotely important to the grand scheme of things. So, it's just the overuse of certain things. We would, there's an index and I'm not sure who puts it out on CNBC. They track how many times the headline of markets and turmoil as a way to kind of track just sentiment in the market. Oftentimes, it's a contrarian signal, right, you have had enough negative headline news, enough people running for the exits, usually that means we're probably getting closer to a bottom and things will start to rebound. Who knows if that's true this time around but it's just interesting to see the usage of certain words that are there again, just to grab your attention and pull you in.
Benjamin Haas 08:29
And I think that speaks so much to where we're at right now. We speak from a very narrow moat here of our client base and the interactions we have with them. I think to those that aren't working with us, this is still probably true but I'm not certain of that. The point is, many people want to be in the know, right? There is a degree when you have gotten to a phase of life, where you may feel like you have enough, you've gotten to a certain point where you are comfortable. The fear of feeling like, I'm going to have to leave that space because things aren't going well. You want to pay attention, you want to read things you want to say, well, is this time different now? We're human. I think all of those things are really common but if we can shift this back to financial planning, I'll kind of put it back to you. We want to be the vessel to kind of filter that information and that's the hard part because we can't control all the things that you see. Now there seems to be more of it and now it seems to be even more sensationalized when it probably has to boil down to two questions. What does this mean for you? And do you need to do anything about it?
Adam Werner 09:44
Yeah, yes. I'm thinking a conversation I had yesterday with a client that was he shared with me, I don't check my balances on a daily basis. I'll check it somewhat infrequently. Maybe it's weekly. Maybe it's monthly but he said it's gotten to the point now where I watch the news. I'm seeing these headlines and it makes me feel scared and depressed at this point just to see all of the negative headlines. It's at this point, here we are, six months from the last market peak beginning of January and it just feels like, it's never going to stop. We're just going to continue to have this volatility, things are just going to continue to go down and even to the point where someone who isn't as plugged in, doesn't check it on a regular basis because he knows himself, I don't need to check this on a regular basis, is having a hard time avoiding the negative emotions that come along with this, even when he's actively trying to not seek it out, like trying to keep it off of his radar. But what you said there those questions on what does it mean? And what are I guess, is it important? And then what should I do, if anything, about it? Ultimately, that's where we want to be that filter for people. So, unlike the social media or unlike the news that is just blasting this information out to every single person that wants to listen to it. We want to be the filter for our relationships. The whole point of why we lead with planning is that we understand their situation so that we can try to parse out, is this something that is going to affect you and even when these news stories are facts, right, even when everything is true, it still needs to come back to? Okay, but then what? Is this something we need to worry about? Is this something that we or is there something then that we need to change or address based off of that information? And oftentimes, the answer is no. But that's where we want to play that role to help figure that out because I think people without any information, without any context, people assume the worst; they think about the worst possible outcome.
Benjamin Haas 11:56
I love everything you just said and it's welling up in me that comment of like, we do, it's going to sound cheesy; we want to hold your hand through that and go back to the main point. I mean, this is why we talk about, is this money you need to touch right now or is this long-term money? You have to know the person you're talking about. There's cash in the bank, you're okay. It is hard to remember that this is a point in time we are in a moment in time and nobody knows what's going forward. We can look back and get frustrated and go, man, we should have predicted this in some ways. Yeah, we knew their supply chain issues. We knew COVID was still around in China. The war was unpredicted but we knew that there was going to be some dominoes. It all feels heavy right now but it's a moment in time. So, if nothing else, we want to provide the context of these things happen. Here's what's happened in the past and what it may mean moving forward but we've prepared for this and that's why the plan exists. If we can keep our focus on that, all these inputs of information and fear and news articles, is it affecting this baseline plan? Do you need to touch this money now? Do you need to do something different? More often than not, the answer is no and that's good. That's why you had the plan. You're sitting in this lifeboat; you don't want to jump out of the lifeboat even when the storms come in and you're taken on water.
Adam Werner 13:20
It often, it just feels anticlimactic or it just doesn't feel as impactful to get to the end of that and feel that doing nothing is the correct response. The emotional and psychological side of, I want to do something that it feels like I have some level of control over anything at this point.
Benjamin Haas 13:44
And that's why I hope people will continue to take the calls or listen to what we do or feel comfortable reaching out to us or share the articles that they have. It's okay if the end result is we're not going to do anything with this. But between how you feel today and doing nothing, a lot of conversation can happen there to put you in a better spot with how to digest this. That's the key. It's okay that the end result is doing nothing. Let's still have the conversation because I think I said it to you before we jumped on here. Worse than no information is misinformation. So if you're dealing with misinformation and then we don't provide you with any information, even if it's stuff you already, yeah, I remember we talked about that or right, yes, that makes me feel better. That's what needs to happen to get you to the end of this. Where now you're going to see, I'm looking at CNBC right now. You're going to see red, you're going to see that breaking, what do you say - breaking news market turmoil, and go, I'm okay. I think I'm okay.
Adam Werner 14:42
Yeah.
Benjamin Haas 14:45
I'm sorry. I feel like I just talked for five minutes, passionately and now. I'm like, what am I passing back to you?
Adam Werner 14:51
Yeah, I don't know.
Benjamin Haas 14:54
Maybe we can just wrap it up with that. We want to be the source of that information. It's okay to have conversations even if you feel like, I know you've told me this, I know we have a plan, I don't always remember what it means. Let's talk about it, that way anything else that you're hearing, you can ask those two questions. What does it mean to you? And do you need to do anything?
Adam Werner 15:14
Yeah, and I think we've kind of alluded to this, but we'll say it explicitly for anybody that's listening. If you see a headline or you see an article, and you just want to kind of run it by us, hey guys, what do you think? What does this mean for me? Please, that is why we are here. We want to be that filter because absent of that information, again, we don't want people to feel like they're on an island and have these negative emotions. When if people have worked with us for a fair amount of time and we've gone through that planning process, we hope that that foundation is there ,that even these inputs and even if they are negative, that it's not catastrophic to their financial plan and to their financial lives moving forward.
Benjamin Haas 16:02
Yeah, and I'll maybe this will be my last thing. Hope is not a strategy. We know that. So, it's not again, to diminish it or go just blanketly, everything is going to be okay, we don't need to worry about it. However, when we know how you're feeling, we can have deeper conversations of okay, let's take that and let's put that into context. Here's what we know historically, here's what we're seeing, we can get into the weeds with some of this data stuff. We do that. We'll put out a call next week but I think your point is, if you read that, use that as the catalyst to reach out to us and go, what do you think? Here's how I'm feeling and let's just do it. We'll hold your hand and walk you through it.
Adam Werner 16:45
Yeah, you often say and I don't know if this ends up in any of the marketing material or on the website or anything like that, but part of our role as financial planners is not necessarily, certainly we want to keep you on the right path, we want to point you in a positive direction but oftentimes it is just avoiding those dark alleys. That's the terminology to keep you from going down a path that we believe is not in your best interest. Oftentimes, those opportunities to divert from the right path are at these emotional times where it's the emotional component that can really wreak havoc on your long-term plan without some discipline, context, and perspective and just having, hopefully us just to be able to hold their hand through a process.
Benjamin Haas 17:33
Some point in time, we're going to get through it. As always, appreciate your insight. I appreciate you being cynical when you read these things and leading by example.
Adam Werner 17:42
This is probably one of my more passionate podcasts.
Benjamin Haas 17:47
I hope it was helpful for everybody. Thank you for all you do.
Adam Werner 17:51
Thank you.
Benjamin Haas 18:02
Hey everyone, Adam and I really appreciate you tuning in. Please note that the opinions we voiced in the show are for general information only and are not intended to provide specific recommendations for any individual to determine which strategies or investments may be most appropriate for you. Consult with your attorney, your accountant or financial advisor or tax advisor prior to making any decisions. Thanks for listening! Investment advice offered through Great Valley Advisor Group, a Registered Investment Advisor.
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