What should we believe!
Posted by siteadmin on Wednesday 6th May 2020.
Last month I talked about understanding why things happen. With recent events, I thought I’d touch on the role the media play in our everyday lives (not just now).
There’s no doubt we’re living in extraordinary times with our liberties, finances and of course our health all very much of a concern. We all want to know what’s going on in the world. But what we want is factual news and not opinion.
How many times have we heard a news reporter say ‘my sources told me --------‘? So is what’s being reported interpretation, speculation or indeed fact?
In so many instances, the way the media report is sensationalist. What sells news is sensationalism, being generally focused on bad news.
The same can be applied to that relating to our investments, where the top line item notes that the FTSE has fallen by x%. Or that billions have been wiped off the value of Britain’s top companies. Never do we hear in headline news that it’s recovered and reverted to the same. Albeit that stock markets often act dramatically downwards yet recover more gradually.
A classic example was the week of the EU referendum. That week and before the result was announced, the FTSE was performing well. The day after the result, it fell sharply. Yet a week later, it had recovered to higher than it was the day before the referendum.
So which part do you think hit the headlines and which didn’t?
In circumstances such as we find ourselves, what people really want to know in lifestyle financial planning terms is:-
- What does the current volatility mean for me?
- Will I still have ‘enough’?
Thus, the role of a financial planner is to provide confidence by clarifying to people that:-
- They’re still on track to achieve their objectives
- If not, that they have options to bring things back on track
- Their faith and patience in the ‘plan‘ will be rewarded
Ultimately, financial planning provides reassurance to people where:-
- This will pass and they’re doing the right thing by remaining invested
- In time, investment markets will recover and their portfolio is diversified
- Financial planning is essential and particularly right now
- The mainstream media often don’t project reality
This is all part of the true lifestyle financial planning process. All being topics that we touch on regularly. More so though now.