Investing Drivelism

I started Real Investing Journal because of a giant void in traditional money media. Newspaper’s business (or occasionally, money) sections, television networks like CNBC, and even the Wall Street Journal claim to report on investing. Yet, the purportedly journalistic endeavors are primarily devoted to news about individual businesses, short-term economic events, mounds of Wall Street propaganda related to active money managers, complex (and usually foolhardy) strategies and products, and pure speculations. Rarely will you hear any of the journalists espousing solid, sane investing strategies.

Investors are starving for a source of real investing news, yet too few seem to recognize this journalistic deficiency. I hope that Real Investing Journal will gradually become one popular American voice for sound academically-vetted investing information. In Great Britain, one rational investing voice is Robin Powell of Sensible Investing (like us, a service associated with a fee-only investment advisory firm–that’s how the bills get paid).

In a recent piece written for a blog called Banker’s Umbrella, Powell wrote about the lack of decent investing journalism on his side of the Atlantic:

“My own view is that, from the reader’s point of view, the money sections serve no useful purpose at all. The industry loves to make investing seem complicated - that’s one of the ways it justifies the colossal charges it levies - but in fact it’s relatively simple. Most investors should keep costs low, diversify as widely as possible, rebalance occasionally, but otherwise do nothing. The fact, for example, that someone’s launched a new fund, or that some analyst thinks US equities are due for a correction, really isn’t important. We call it “noise” - an unhelpful distraction. Investing is (or should be) dull. And dull doesn’t sell newspapers.”

He, far more eloquently than I, expresses, in a single paragraph the sorry state of money news around the planet. We, as news consumers, must demand better. Stop reading the drivel from Investor’s Business Daily (more like “Gambler’s Business Daily”), Fox Business, and your local paper. Don’t get me started on the money radio shows. 99% of the financial you hear on the radio is worthless, at best. Those weekend talk shows (I know, we host one, but we’re in the less than 1% of honest ones) are even worse, many selling truly dangerous schemes.

We can’t expect the situation to improve unless each of us takes action in some small way. At the very least stop consuming the drivel they dish daily. Write to the editors, and program directors, demanding better. Don’t be shy about telling friends that playing the markets is a fool's game. Get smarter about money. Of course, we’ll keep trying to help, even if the topic seems a bit dull.

Read the Banker's Umbrella Article

Don McDonaldComment