Should I listen to the financial media?

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David John Marotta
President, Marotta Wealth Management, Inc., Marotta Wealth Management, Inc.
http://www.emarotta.com  
434-244-0000

David John Marotta is the President of Marotta Wealth Management, a fee-only financial planning and asset management firm in Charlottesville, Virginia. He is an oft-quoted writer and speaker on financial matters and his weekly financial column can be found at www.eMarotta.com

Should I listen to the financial media?

 

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Host: Should I listen to the financial media?

David Marotta: All of the financial media, so CNBC and Investment news and money magazine has to put out something new every single month. Another NAPFA member calls this financial pornography because they have to tabulate and get you coming back for the latest stock tips and the latest best mutual funds for this coming year. In truth, if they were the best financial advisors they would be every single issue they would say, we recommend a diversified balanced portfolio that you rebalance regularly. We recommend you not try to time the markets and figure out what industry you should be jumping in and out of.

Timing the markets, it turns out will produce much lower returns. So, we do not recommend that our clients listen to the financial media. If you have a good diversified portfolio and the S&P is doing one thing, your investment portfolio may be doing something very different. The S&P 500 will be a very aggressive growth. It will be doing well in bull markets and poorly in bear markets. A diversified portfolio on the other hand, will have a much more balances returns and therefore, there won t be the excitement that they have in the financial media.

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