Does the financial news media help or hurt investors?

I am of the opinion they mostly hurt investors.

Let’s just take a look at some headlines from 2020 & 2021 and I will also put the value of the S&P 500 Index* next to each one for that day…truth be told I could take headlines from every week going back 30+ years and you would see the same things.

Dow Drops 600 Points on Global Growth Concerns (Wall Street Journal – January 30, 2020) – S&P 500 closed at 3283 points

Stock markets in biggest fall since 2008 (Guardian – March 9th, 2020) – S&P 500 closed at 2746 points

COVID-19 to Plunge Global Economy into Worst Recession since World War II ( – June 8th, 2020) – S&P 500 closed at 3232 points

Unemployment Claims Remain Historically High ( – October 8, 2020) – S&P 500 closed at 3446 points

Stocks Drop as Dow Has Its Worst Week and Month Since March ( October 30th, 2020) – S&P 500 closed at 3269 points

Stocks Drop as Wall Street’s Unease Stretches to a Fourth Day ( – June 18th, 2021) – S&P 500 closed at 4166 points

Charts Spooking Wall Street (Bloomberg – October 29, 2021) – S&P 500 closed at 4605 points

Wall Street rocked by new COVID variant fears, Dow plunges over 900 points ( – November 26, 2021) – S&P 500 closed at 4594 points

And where are we now as of 4/12/2022 –  S&P 500 closed at 4392 points

So, from the start of 2020 to the day I am writing this the S&P 500 index is up 34.85% – not counting dividends.  But what did the media try and do every step of the way – Scare the you know what out of you.  Did the market go up and down since the beginning of 2020?  Sure.  Is that abnormal?  Absolutely not!  It is completely normal.  The outbreak of COVID was a massive fear for most human beings, and rocked the whole world. But, we are working through it to this day, and the world is finding its new normal.

The real question I am trying to get people thinking about is: why does the media do this, day in and day out?  Are they bad people?  No.  But they are people and they are in business to make a profit.  Nothing wrong with that, but just remember what is going on when you watch or read the news.  They know BOLD statements get a lot more eyeballs than “the market is up (a lot) today or down (a lot) today or didn’t move too much today and this is perfectly normal and to be expected so don’t worry and get back to your lives”.  They can’t say that.  If they did, who would tune in day after day or buy their magazine, newspaper or investor report.  And if nobody was watching, reading or buying then they couldn’t sell advertising which is typically their main source of revenue.

Again, they aren’t bad people.  They are just trying to get as many people watching or reading so they can sell more advertisements and make more money and boost their ratings and on and on it goes.  They are not there to give investment advice and make sure you reach your financial goals.  They are not there to guide you on saving for your kids or grandkids college.  They are not there to make sure you can retire someday.  They are there to sell advertising and keep eyeballs attached to their stuff – to sell more advertising at higher and higher prices.  Again, nothing wrong with that.  Just be forewarned that the headlines and “experts” they bring on are there for ratings, first and foremost.  And scary predictions sell more than the simple truth.

The S&P 500 Index is an unmanaged index of 500 stocks that is generally representative of the performance of larger companies in the U.S. Please note an investor cannot invest directly in an index.

This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results.  This information should not be relied upon by the reader as research or investment advice regarding any funds or stocks in particular, nor should it be construed as a recommendation to purchase or sell a security.  Past performance is no guarantee of future results.  Investments will fluctuate and when redeemed may be worth more or less than when originally invested. 
4673223/DOFU 5-2022