What the Media Isn't Reporting


The Economy: What the Media Isn’t Reporting

The economy: what’s going on? I’m getting this
question several times a day. My general opinion is
that the market turmoil is real. It’s happening. It’s a
big deal. While the best course for the government to
take is still debatable, people who know a lot more
about macroeconomics and the particular market
problems we’ve got right now are at the helm,
attempting to stem the credit crisis and help with this
transition.

Unfortunately, I sense there might be a conflict of
interest in what the media has been reporting.

When an insurance salesman tells you how much
insurance you need, there is a potential conflict of
interest. I think the media has an unacknowledged
conflict of interest in reporting this story.

Fear and bad news sell newspapers and gets
people to turn on their TVs.
The more dire the
reporting, the more likely we are to tune in, and the
more money they can get from advertisers. So, there
is a built in conflict of interest in the media reporting
the financial situation. I’m not calling anyone in
particular unethical. I’m just encouraging you to think
analytically about the media.

The media sells you your fears. You might lose all
your money and your house! That will get your
attention and you’ll read the article or turn on the TV.
This fear mongering ratchets up our collective anxiety
level and can be a self-fulfilling prophecy. The more
people panic, the worse this whole thing is going to
get before it gets better.

I encourage everyone to be skeptical. Most
journalists don’t know much more about the economy
than you do. Many TV experts don’t know much more
than the journalists. Before listening to an expert,
consider their qualifications.

With my full retainer clients, we’re reevaluating,
not panicking. When it makes sense, we’re looking
at client goals and portfolios. Now is a great time to
judge emotional tolerance to risk. If this market
turmoil makes you want to sell sell sell, you’re risk
adverse! We can adjust your portfolio with that in
mind, or it might make more sense to wait until the
dust settles to rebalance your portfolio. We decide on
a case-by case basis.

I’m encouraged by signs that show a lot of people
are reacting to the crisis by trying to control what
they can control how they approach their own
personal finances­and not what they can’t
:
Lehman Brothers, Freddie Mac, and AIG. In the last
few weeks I’ve gotten more calls from potential clients
than ever. Of course this is great for my practice, but
it also shows that contrary to what you hear about in
the media, some people are reacting to their justified
concerns by controlling what they can, how they
handle their finances.

I’ve spent a great deal of time reading about this,
so I started to build an article archive of expert
opinions. If you’d like a sample, let me know and I’ll
send one along.

by Bridget Sullivan Mermel
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