Staying Financially Informed Without Losing Your Cool

by Joey Beech | August 15, 2022 | Personal Finance

Does your gut tighten when the market report comes up? Do you quick scroll or turn the channel when the red stock charts appear? There are a lot of upsetting things happening in the world. It is tempting to unplug from the endless information stream, but a more practical solution is to adjust how we consume it.

Gone are the days when a calm, neutral voice shares the day’s top stories. Now we have thousands of channels and influencers competing for our attention and the dollars that come with it. They have to differentiate their stories to set themselves apart. In the process, they add opinion and commentary to financial news as if they were covering a sporting event. With every market shift they are looking for winners and losers they can praise or pick apart with heaps of emotion driven adjectives. In this fight for our attention, our nerves are taking a beating. 

Like many things in our society, it is getting louder and harder to filter the facts out of the fluff and filler. Keeping with the sports analogy, instead of getting the score and relevant facts, you get hype, opinions, and predictions. The game and players are the same, but what you hear from the home team broadcasters feels dramatically different from those of the opponent’s announcers.

To get the financial information you need without getting your mood hijacked by commentators, I recommend the following five tactics when consuming financial news.

  1. Focus on facts. Filtering for just the facts is like a mental puzzle game. It not only helps you focus on what’s important, it helps keep your mind sharp.
  2. Know how they are funded (follow the money). Sports channels aren’t likely to air a segment on the negative health effects of drinking beer, given beer ads are a significant part of their revenue, and their audience is full of loyal beer drinkers, like myself. The free website that provides good information on smart purchases but is largely funded by credit card and loan promotions, is a good example of consider the source. The content provides tips on how to make wise purchases, but it is surrounded by huge credit card banner ads and blinking Apply to Refi buttons between each paragraph. Beyond the ads, much of their “content” is focused on how to get the most out of credit card rewards programs. The underlying message is that part of a smart purchase is paying with a credit card.
  3. Notice the injected emotion. Excited voice inflection and emotion may be the hallmark of great sports reporting but in financial news it’s dangerous. Saying, “The Federal Reserve increased interest rates one-half of one percent,” doesn’t sound as exciting as, “The Fed hiked rates today.” The word choice seems subtle but the images they convey are not. The recent rate change was expected, widely reported ahead of time, and already priced into the market. Yet that didn’t stop pundits from hyping it up as if it was a huge upset, like a 15 seed team beating a 2 seed to advance in the March Madness NCAA basketball tournament.
  4. Look for consistency across sources. The spin of the story may vary widely, but the facts should remain the same. Reading, listening, or watching a variety of sources can provide perspective. Like the score of a game, the stats on what the market has done should be the same, but everyone’s projection of what it means will likely vary.
  5. Turn the channel. Once you get the info nuggets you need, turn the channel. Listen to music, sports, or comedy. Pick something you enjoy and find relaxing. Sound financial decisions are best made when we are calm and relaxed. Tuning out the noise is good for both your financial health and your mental health.

Regular application of these tactics will help you keep your financial cool and avoid making bad bets based on the market hype.

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