Should you ignore the media? By media I mean television, radio, magazines, newspapers and internet news, and financial analysts. When it comes to investing your hard earned money, the answer is “yes”! If you want to invest successfully you need to learn to ignore the media, there is just too much noise out there.
You have to understand that the media exists to make money for themselves first and foremost. Just like any corporation they exist to generate profits, and they do this by selling advertising space in print, and selling airtime on television and radio. Unfortunately in the world we live in bad news sells papers, and increases viewership. Here are some recent headlines:
“Homes Becoming Less Affordable for the Masses”
“Looming spending cuts hit more than defense”
“Small business owners more pessimistic in July”
“German investor optimism drops unexpectedly”
“France sees zero economic growth in Q2”
“NYSE stocks posting largest volume decreases”
“Europe edges closer to recession as economy shrinks 0.2%”
“Greek Recession Making Bailout Targets harder to Meet”
“Stocks fall as economic malaise reaches Japan”
Reading those headlines would make you think the world is coming to an end. Reading those headlines will want to make you put all your savings under a mattress. How much will you earn by keeping your money under a mattress? If you want to read the news, that’s fine, just take it with a grain of salt and don’t let it influence your investing goals.
“A public-opinion poll is no substitute for thought.” -Warren Buffett
When it comes to your money and investing, it is easy to get emotional. Surrounding yourself with negative news will influence your investing style. If you panic you will sell when stock prices are low, and this is exactly the wrong time to sell.
The solution is simple: ignore the media, ignore the noise. Educate yourself on how to invest responsibly, how to minimize your risk, and how to maximize your returns. Do not jump from one investing strategy to the next, and in the long run you will do very well for yourself.
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