24. Financial Media - Friend or Foe?

Welcome to Episode 24 of Retire Me!

On this week's episode, we wrap up the series Key Questions for the Long Term Investor.  Today we look at the question:  Should I make changes to my portfolio based on what I am hearing in the news?

The narrative in most financial journalism is almost always biased to the negative.  To illustrate this, I did a google search on the terms "bull market" and "bear market".  See below:

It would be reasonable to think that the markets are scary and bear markets happen all of the time.  But historically, bull markets are more frequent and longer-lasting than bear markets.   See below from Investments Illustrated: 

When you hear about bear markets in the news, remember that

1. Bear markets happen often (once every 5 years on average)

2. Their causes are always unique, leading us to worry that "this time is different"

3. We will find a way through it because we always do

4. Try and turn off the news.  At least, the financial news.

Have a great week!

Mark

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