The Financial Media Can’t Help Your 401(k)

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CNBC has been around since April 1989.  Bloomberg Television launched in January 1994. Neither one of these cable business news giants can help you preserve and grow your individual company 401(k) retirement plan account.

Television media personalities are skilled in the art of grabbing the latest financial or economic headline. Their producers then immediately link that headline to the reason that the stock market is moving up or down on a particular day.

After the stock markets close for the day, the talking heads are happy to explain the reasons for the stock market move that day; either up or down.

When the stock market is up in a big way, the television dialogue is dominated by improving economic news and positive business headlines.  When the stock market is down in a big way, the content moves to “doom and gloom” for the economy and the stock markets.

The guests on financial television fall into the same category. They are the very definition of “the smartest person in the room.”  Each new guest feels the obligation to make a more accurate call on the next big direction for the stock market or the U.S. economy.

There is never a suitability standard for the investment management advice given.  When economic and stock market conditions change, there is no review of the previous investment performance recommendations.

If these financial experts actually had any meaningful or useful investment management information, why would they broadcast their investment knowledge to the millions of viewers on television?

The investment management industry has spent billions of dollars in order to develop a possible an advantage over other stock market investors. There is no chance that they would give this information away for free on television.

The real value of cable television investment advice is in the sale of advertising time. There is now way on earth that the same investment advice can pass for investment advice.

Cable TV business news is nothing more than a made-for-television stock market reality show.  Every business day provides another opportunity to capture the hearts and mind of individual investors. And then sell them both to advertisers.

Cable TV business news networks don’t care about helping you preserve and grow your company 401(k) retirement plan.  Their only goal is to get you to watch.

Ric Lager
Lager & Company, Inc.

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