Good reads from around the Web.
One of the things I’m least proud of – aside from my D grade in French and my habit of laughing aloud at my own “hilarious” jokes – is my fascination with the financial media.
I read the news websites and blogs avidly, and watch a fair chunk of CNBC and Bloomberg, too.
If you’re an active investor (for your sins) then I’d argue the former can be a good source of ideas, although only as a starting point for doing your own research.
But I can’t remember ever making money from an idea I got off the TV.
I’ve consoled myself that I watch CNBC and Bloomberg like other people watch football, or that I use the endless procession of talking pundits as a contrary-indicator.
(Seriously: I think they put Nouriel Roubini (a.k.a. “Doctor Doom”) in a cupboard under the stairs between market wobbles).
When rising markets bring you down
It seems though that even this light telly watching could be dangerous, according to researchers from Kansas State University’s Financial Planning Research Center.
As reported by Advisor One, these academics found:
… stress go up when watching financial news, and hearing that the market went up causes stress levels to rise even higher.
“Specifically, 67% of people watching four minutes of CNBC, Bloomberg, Fox Business News and CNN showed increased stress, while 75% of those who watched a positive-only news video exhibited an increase in stress,” they wrote.
Yes, you read that right – stress levels actually rose with the market for most people. So making sure you switch off during a meltdown might not be enough to protect you from rising anxiety, and all the poor investing decisions that could come with it.
The researchers believe that this rising stress is caused by the fear you’re missing out on even better gains.
Hmm. I’ve had a great year from my investments, and I’m reluctant to tamper with a winning formula. Who knows? Perhaps the bouts of Bloomberg watching is contributing in some unseen way to my returns?
However if it’s also contributing to me having a heart attack at 50, I might have to think again!
Be a passive investor for wealth and health it seems.
From the blogs
Making good use of the things that we find…
Passive investing
- The flight path approach to asset allocation – Rick Ferri
- Living off dividends and interest – Oblivious Investor
- US dividend-focused ETFs – Morningstar
- What happens when a bond ETF gets too big? – Learn Bonds
Active investing
- Chewing on Apple – Investing Caffeine
- How a takeover can create value – UK Value Investor
- Advice for new investors – Gannon on Investing
- The case for German property (Part one of four) – Wexboy
Other articles
- Why Disney spent $4 billion on Star Wars – All Things D
- Compound experience, not just interest – Abnormal Returns
- The secret to happiness: Live like a college student – Mint
- Does frugality turn you into a recluse? – Retirement Investing Today
- Could you give up clothes shopping for a year? – Budgets are Sexy
- 100 words on getting up early – Len Penzo
Product of the week: I can’t find any interesting financial products to flag up this week. And I’m not alone, according to This Is Money, which says all the best rates have been slashed.
Mainstream media money
Highlights from the wall of noise…
Passive investing
- Lyxor cuts fees as ETF price war hits Europe – FT
- More US pension funds are using ETFs for bonds – P&I
Active investing
- Why are companies hoarding so much cash? – The Economist
- More evidence illiquid assets and big funds don’t mix – Bloomberg
- Investing in closed-end funds in wind-up mode – FT
Other stuff worth reading
- Lessons from the investors of 300 years ago – Wall Street Journal
- FSA forces pension funds to give lower projected returns – FT
- HMRC paying divorcees cash for tax cheat tip-offs – FT
- Trillions of dollars of share certificates ruined by Sandy – FT
- Minister: Middle-class child benefit losers are NIMBYs – BBC
- Eat well on a budget – Telegraph
- How micro-loans are helping the world’s poor – The Guardian
Book of the week: Investec fund manger Alastair Mundy seems to be highly-rated, but who knows how long his run will last? He’s also a very funny writer, though, as proven by his new book You Say Tomayto. It’s a collection of monthly notes to his investors. Buy it and you can enjoy his wit without paying to take a chance on his stock picks.
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hehe – ice the TV. I’ve never watched Bloomberg or CNBC since working on video transmission systems, and I’ve had a great investment year too. I don’t really know why, either, there’s been so much sturm und drang in the markets and sometimes it’s a fight to do whay I believe in over the gut. And it’ll probably all go titsup in a great euramerican crash next year.
However, TV is a terrible medium for anything you have to think about, as much as it’s a great medium for stuff you want to feel. Why exactly anybody watches financial TV puzzles me. The interviewees aren’t that pretty, usually being middle-aged blokes because that’s where the money is, the soundbite pacing of the medium doesn’t suit the subject, and the teleplay is eerily similar to business meetings and presentations when they do have to show charts.
And I presume you have to put up with ads too? Why are you doing this to yourself 😉
Ah, but the presenters ARE that pretty, whichever gender you’re after…
Ads — I tend to watch with a remote and live pause though. In fact I virtually never watch ads anymore, and haven’t for years…
There’s no excuse though. I think I’ve done well be almost doing the opposite to what they say, but I’m probably kidding myself.
We’re talking mainly tea breaks, anyway — I don’t sit down in my slippers with a pipe for 2 hours to tuck in!
Well, not often.
CNBC have been trashing APPLE all week
Each presenter must be given a position where market is going–so when it does turn,they replay the tape when there right.
Joe Kernen takes no prisoners–squackbox
European side Louisa Bojesen takes no prisoners—gives them plenty of rope to hang themselves—in a nice way
I’m talking Fund Managers when there invited on show
Read Nate Silver, The Art and Science of Prediction .
Essentially TV pundits are less interested in being right than in being opinionated. Imagine someone like me, a passive fund manager, begin asked about a stock or a Market. Saying you have no idea what will happen next is not good TV. Even if it is true.
Thanks for the shout out – glad you enjoyed the article! Have a great rest of your weekend over there 🙂