The media knows what sells, negativity. Newspapers, television, the web, social media, etc. are all fighting for your attention. They know that by reporting that a disaster is coming will likely catch your eye. 

Throughout history, financial media has loved using fear and doubt to get your attention. This week, I shared a post on LinkedIn showing a few examples of headlines we have seen the past 10 years and how the market has performed… 

Stock Market 10 Year Return

All the articles above reference a bubble or concerns in the stock market. It would be hard to not to click on some of these headlines! Nobody likes losing money and it’s our human nature to respond to fear. During this negativity, the market had a total return of +370%. If you only read the headlines, you would probably assume the market would be down overall. 

Even if we include previous down markets like the DotCom Bubble (2000) and Global Financial Crisis (2008), the stock market’s total returns the past 30 years would be over 1,600%, slightly above 10% annually (From 1991-2021). Most investors would be shocked by that return if they knew what happened along the way: housing crisis, tech bubble, global pandemic, and more. 

Bottom Line 
Media companies monetize on our flaws by using fear to grab our attention. It’s seen as an opportunity to increase engagement and advertising revenue. It could be about the stock market, Covid-19, or even your favorite sports team. Be careful letting these negative headlines impact your decisions making, especially when it comes to your money. If you have any questions regarding the current market, please don’t hesitate to reach out!

George Maroudas 
Twitter @ChicagoAdvisor 

Disclaimers and Sources:

Stock market represented by the S&P 500 index.

Stock investing includes risks, including fluctuating prices and loss or principal. This information is not intended to provide specific advice or recommendations about any stock nor is it intended to be a recommendation to buy, sell or hold any stock investment. We suggest speaking with your financial professional about your situation prior to investing. 

Please consult your financial advisor regarding your specific situation. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. All investing involves risk including loss of principal. No strategy ensures success or protects against loss. This information is not intended to be a substitute for specific individualized tax advice. The Standard & Poor’s Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.