Seventh of a 10-part series
I love the media! It entertains and informs me; I rely on it daily. Freedom of the media is enshrined in most democratic constitutions.
The Universal Declaration of Human Rights states it well: "Everyone has the right to freedom of opinion
and expression; this right includes freedom to hold opinions without interference, and impart information and ideas through any media regardless of frontiers."
This is all good, but it cannot be provided for free. That's where you and I come in. If the media can keep our eyes and ears glued to its content, then we will be more likely to see and hear the advertising messages that ultimately pay for the content.
Bad news and shock value sells advertising and, in our hyper-stimulated technological world, the media needs to compete fiercely.
Building wealth in the capital markets is a long-term endeavour that does not frequently capture media attention.
People are more likely to be drawn to outrageous and shocking messages such as, "Housing Meltdown," "Dow takes Record Plunge" or "Ten Cheap Stocks to Own Now!"
I shudder at the wealth that was permanently lost when investors bailed out of their equity investments in early March of 2009 and missed out on the opportunity to perhaps double their money since then, content to "go broke safely" within the comfort of a "safer" GIC portfolio. I partially blame the talking heads of major network television.
The short-term focus is particularly obvious in articles that dispense investment advice and are framed to appeal to human emotion, especially fear and greed. Investors should view these messages as entertainment.
Warren Buffett once said, "To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information. What's needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework."
With the right advisors and a reasonable amount of due diligence, it is possible to determine a sound intellectual framework and use it to continually test all your financial decisions. Poet Ella Wheeler Wilcox wrote, "One ship drives east and other drives west by the same winds that blow. It's the set of the sails and not the gales that determines the way they go."
Richard Vetter, BA, CFP, CLU, ChFC, is a senior financial advisor with WealthSmart Financial Group/Manulife Securities Incorporated in Richmond. Manulife Securities Incorporated is a member of the Canadian Investor Protection Fund.
