The media aim to attract viewers, readers, followers and advertising revenue. They are not committed to giving you sound investment advice.
Newspapers (and all media come to that) rely on a network of sources. This is particularly true of a technical subject such as business or money. The deal is simple. You give us copy and we'll give you exposure.
Once you start to look critically at articles in the investment sections of the press you will notice how many are not news at all. They are confections cobbled together from a single idea (or quote) and puffed out with a number of phone calls to friends and a quick trawl round the Web. This may be efficient journalism, but it's rubbish as investment advice.
Watch out for:
- Unsupported assertions in the passive tense: ("Investors are being urged to……blah blah"). This translates as "here is a contentious remark to build some copy around".
- "Experts say…". This translates as "the guy we found who was willing to talk to us said….".
- "Experts recommend….". This translates as: "these are the things being pushed by the guys to whom we owe favours".
- "Some experts recommend…..". This translates as "we could find very few people to agree with this tosh" or "we really should have checked this with a number of people but could only find one".
Notice how many media contributions are made by people with a commercial interest in shifting product. They won't do anything as crass as recommend their own Funds.
Notice also how 'hot topic' articles are thrown together. The hot topic may , for example, be ethical funds. This is not news, it's just a topic. The article would not be complete without a short list of ethical funds. These will be presented as recommendations, but will have no arguments supporting their apparent pre-eminence. The suspicion must be that they are the result of one phone call. Well, be honest, you are a journalist fighting to meet a deadline, what would you do?