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The Financial Media Can’t Help Your 401(k)

The financial media can't help your 401(k).

CNBC has been around since April 1989.  Bloomberg Television launched in January 1994. I can tell you with all confidence that neither of these cable business news giants can provide you with the necessary investment management strategy to both preserve and grow your individual company 401(k) retirement plan account.

The television media personalities on these business news channels are skilled in the art of grabbing the latest financial or economic headline, then immediately linking it to the reason that the stock market is moving up or down on a particular day.

After the stock market moves one way or the other, then the talking heads on the financial news networks are happy to explain the reasons for the stock market move.

When the stock market is up in a big way, the television dialogue is dominated by improving economic news and positive business headlines.  When the stock market is down in a big way, all you hear on these channels is about the upcoming “doom and gloom” for the economy and the stock markets.

The guests on financial television fall into the same category. Every financial talking head wants to look and sound like “the smartest person in the room” in regard to the next big direction for the stock market or the U.S. economy. 

The truth is that these people have no accountability for how accurate their recommendations are in the days, weeks or months after they appear on the business news channel. When you need them to update their expert forecast, they are no where to be found.

If these financial experts, or the companies that employ them, had any meaningful or useful investment management information, why would they broadcast their investment knowledge to the millions of viewers on television?

In an industry that spends millions of dollars trying to develop an investment management edge over other stock market investors, why would these same experts give this information away for free on television?

You have to ask yourself what is the value of the free financial information made available day after day on the business news channels?

The financial experts on financial television don’t have your long-term investment interests in mind.  The constant day-to-day noise of the stock market is what they “sell” their viewers and listeners. 

The content on the business news channels is nothing more than a made-for-television stock market reality show.

Every business day is another giant marketing opportunity to capture listener’s eyes and ears regarding the reason that the stock market is up or down. The real reason for a stock market move is not the point of the business news channels.  Instead, the content is intended to keep you watching the business news channel as long as possible.

Any stock market and economic forecasts given on a business news channel is not meant to be meaningful to long-term stock market investors.  Instead, the content is intended to keep you watching and listening every day.

The business news channels are in business to sell commercial advertising time.  They are not in the business of providing any level of useful and meaningful investment advice.

You have to be financially responsible enough realize that the stock markets don’t know or care when you are going to need to live off the money you have invested in your company 401(k) retirement plan.  The same goes with the cable business news channels.

Ric Lager
Lager & Company, Inc.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

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