From coronavirus to the ills of the financial markets - why you should ignore the headlines

With Brexit in a temporary lull we should all be enjoying a long overdue break from some of the sensationalist headlines we’ve grown accustomed to.

However, along came coronavirus - and a fresh outbreak of media hysteria.

Although very different topics, they share an easy ability to generate stories that prey on our emotions; raising doubts and inducing fear - manna from heaven for the media.

The same can be said for the financial markets, which have long been a source of doom-predicting headlines that fuel the media engine.

Headlines can damage your wealth

But these stories don’t just benefit the media, they also power the markets themselves with negative and positive coverage constantly sparking buying and selling sprees.

This trading activity can generate billions of pounds worth of fees on a daily basis, charges that are paid for by deductions from investors’ funds.

For traders and investment firms it’s a no-lose situation, which is more than can be said for the individual investor. (See our article on how the cost of investing erodes your wealth)

The media and the Millennium Bug

Perhaps the granddaddy of all media scare stories came 20 years ago.

Many of you will remember the so-called Millennium Bug at the turn of the century which predicted that computer systems across the globe were about to crash because they couldn’t handle the date change.

The media had a field day, stoking widespread fear about the potential consequences, which included planes falling from the sky.

In the event, the Y2K bug failed to bite and transition from one millennium to another passed smoothly, but only after a huge (and many would say largely unnecessary) investment in IT.

If you’re feeling a little cynical at this point, then we think you’ve a right to be.

Just ignore the headlines and relax

For far too long, the wheels of the wealth management industry have been turned by the media at the expense of ordinary investors.

This isn’t an approach we follow at BRWM. In fact, we do things very differently; in a way that preserves our clients’ wealth and helps them to achieve their goals in life.

Other wealth management companies are unlikely to point to the leading academic research shows that no-one can systematically beat the markets over time.

Nor are they likely to explain the costs and impact of excessive trading and 'playing the market'.

To us, this merely highlights that their approach is very much in their interest.

The alternative, chosen by BRWM’s clients, is an evidence-based strategy which aims to capture the returns of the stock market without incurring the costs.

Over time, this so-called 'passive investing' approach can have a strongly positive impact on the value of their portfolio.

Not only that, they can sit back, relax and ignore the doom-mongers’ financial headlines, safe in the knowledge that they’re also shielded from the effects of the ongoing Brexit saga… but that’s another story.