Financial Media Irresponsibly Reports News About the Market
One of the key components of keeping your emotions (both fear and greed) in check is to be able to interpret what you read. CNBC has to be the worst in over sensationalizing stock market results. Either their writer's really believe these headlines and don't understand the difference between percentages and stock market points or they are purposely trying to skew reality. This morning we get a good example.
TEXT ALERT, BREAKING NEWS!!!!
"Dow Jumps more than 100 points, tries to avoid longest slide in 40 years."
Now one could read this and come up with the following assumptions.
The Dow is having a good day. It is up over 100 points.
The Dow started the day with a big jump in value.
The Dow is up over 100 points. That is incredible. That is triple digits.
Oh no, the Dow is down 8 days in a row.
What if the Dow has 9 days of a negative return?
What if the Dow sets a new record of over 40 years? The Dow could be in trouble.
A 100 points is an increase of .40% growth on the Dow. That is not exactly something to get excited about.
Over the past 8 days the Dow has lost a whopping -3.4%. Wake me up when the Dow is down 15 to 20% and we get worried.
Finally, CNBC has this fascination with the Dow when in fact it is not even the most relevant stock market index for results.
I truly do wonder if these writers understand percentages and can interpret realistically what is happening with the stock market. The problem is that they are doing nothing productive in their writing to help investors understand how the market works. It is irresponsible writing at its' core and just adds to the overall problem in America - financial misunderstanding.