Microsoft’s Nathan Myhrvold once said, “It is better to predict dramatic things that don’t happen than boring things that do”. CNBC and Fox Business use this playbook to drive viewership as they parade out market experts to tell us what will happen next.
Strip away the fancy studios, polished anchors, sleek graphics and they are no different than the ladies on The View discussing who George Clooney will date next. Entertaining, but not worth much if you want to make smarter financial decisions.
What CNBC and Fox Business won’t tell you is the future. They won’t, because they can’t. I’m not saying this to be mean. They never said they could. Certainly we don’t expect them to (right?). I only say this to gently remind you that the future is fundamentally unknowable.
Since it’s unknowable, you and I shouldn’t spend too much time listening to people predicting it. As investors, we spend way too much time focusing on things we can’t control and too little on the things we can control. Like:
- Clearly knowing your short and long-term goals
- Defining your investment time horizon and risk tolerance
- Diversifying your investments
- Prudently maintaining a portfolio aligned with your risk level
- Tending it over time to harness the power of the capital markets and compounding
- Rinse and repeat
Watching CNBC or Fox Business is a distraction from the boring task of making smarter decisions. Even worse, they constantly work to entice you with dramatic predictions of hot sectors or top pick lists. That may be helpful if you’re a trader but outright harmful if you want to invest wisely.
I suggest you limit your exposure to the financial news. Too often its just “newstainment” designed to mirror the collective pessimism or optimism of the day. By limiting it, you diminish its power to feed your natural fears or greed.
Once you accept that the future is unknowable (you have right?), you are free to focus on faithfully executing a process to help manage things as reality unfolds.
CHALLENGE: Stop watching CNBC, Fox Business and other financial news for one week and tell me your experience. Tweet to @roger_whitney