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Are You Addicted to Financial Porn?

Writer: Joe WoodhouseJoe Woodhouse
Jul 26, 20192 min read

Financial pornography:  The depiction of investment and/or financial information in a sensational manner so as to titillate or arouse a quick intense emotional reaction.


Financial Porn is a slang term used to describe the wild and sensational reports of financial news or products. Causing irrational buying (or selling) that can be the downfall of an Investors financial (and mental) health. Short-term focus by the media on a financial topic can create excitement or fear that does little to help people make smart, long-term financial decisions, and in many cases, clouds investors' decision-making ability.

It’s been said that the average DIY investor makes 30 year decisions based on the last 30 minutes news

These days you have news and information available at your fingertips 24 hours a day. 24/7 News channels on TV, the black hole that is the internet, Twitter, your mate Dave down the pub, and unfortunately, everyone’s an expert...


All of this has led to a large increase in Financial Porn.


Examples of Financial Porn


The constant barrage of adverts for easy to use trading platforms, videos, links, or Facebook Ads that promise to “break you out of the rat race” or make you “financially free” in 12 months. Articles telling you what the greatest trends of 2019 are or the shock news that the market has had its biggest gains (or losses) since (insert your own time frame here).


It is designed to amplify your emotions using seductive language and often encourages rash decisions by dramatically exaggerating the facts.


5 Tips How to Avoid Financial Porn


1. Stick to the basics


For 99.99% of people, you don't need to hold individual stocks or shares, or the 2019 hottest IPO. Just invest in a diversified portfolio that matches your attitude towards risk and that tracks the markets. Everything else is hype and irrelevant.


2. Avoid rash decisions


The financial news tells you what is happening in the markets today. It will have no bearing on what will be 10 or 20 years from now. Basing your decisions on a single days news will surely lead you down the wrong path. Let your emotions calm down, take a step back and if you have doubts, DO NOTHING.


3. Invest for the long term


Invest for the long term, and buy, and continue to buy, and hold. As I say time and time again it's about TIME IN the markets not TIMING the markets. Every single day the stock markets will jump up and down more than a box of frogs on a gas stove but over the long term, as decade after decade this is proven, the stock market WILL continue in the only direction it's ever gone, and that is up.


4. If it is too good to be true, it probably is


This may be cliché , but it is sound advice. Nothing is ever risk free and if someone is promising you quick returns at a ridiculously high rate, walk away and do not look back. These promises are guaranteed to be nothing but financial porn.


5. And last but not least, if you're still unsure, reach out to a qualified professional who can help you.


Until next time,




 

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