I recently came across a fantastic article written by my friend and colleague, Sam Instone. It highlights some truly important insights that I felt compelled to share with all of you.

A client recently asked me something that stopped me in my tracks: “Why is the financial news always so negative?”

It’s a brilliant question that gets to the heart of how we consume financial information – and more importantly, how it affects our investment decisions.

The Business of Bad News
Here’s a sobering fact: research shows that each negative word in a headline increases click-through rates by 2.3%. That’s not a typo. Media outlets aren’t being pessimistic by accident – they’re responding to what drives revenue.

Think about the headlines you’ve seen this week. “Markets tumbling,” “inflation fears,” “property sector hit” – they’re designed to grab your attention, and they work brilliantly at doing exactly that.

Trust in Transition
This wasn’t always the case. In the 1960s and 70s, financial reporting was markedly different. News anchors delivered information with measured calm, focusing on facts rather than fear. Public trust in media sat at an impressive 70% – today it’s dropped to 30%.

The irony? This shift towards negativity has happened during a period of unprecedented improvement in human metrics: wealth, education, and lifespans have all trended upward.

Your Portfolio and the Panic Button
Here’s where it gets personal. As your financial adviser, I’ve seen how constant exposure to negative news affects investment behaviour. The simple recipe for market-level returns – owning quality companies and holding them long-term – gets complicated when we’re bombarded with reasons to worry.

Studies consistently show that the average investor underperforms their initial investment. Not because markets fail them, but because they react to headlines, trying to time their entries and exits. This reactionary approach often leads to buying high when optimism peaks and selling low when fear is at its maximum. It’s a cycle that’s hard to break, especially when every news outlet seems to be shouting about the next potential crisis.

Consider the last major market downturn you experienced. How many investors sold at the bottom, locking in losses, only to miss out on the subsequent recovery? It’s a pattern we see repeated time and time again. The constant stream of negative news creates a sense of urgency, a feeling that we must act now or face dire consequences. But in reality, the best action is often no action at all – staying the course with a well-diversified, long-term investment strategy.

Moving Forward
Does this mean you should avoid financial news? Not at all. But understanding its business model helps you consume it more wisely.

Remember this: Markets have always faced challenges. Last week’s headlines about property concerns, inflation battles, and growth warnings aren’t new – they’re just wearing different clothes.

Your Takeaway
Next time you feel that surge of anxiety from a financial headline, pause and ask yourself: “Is this information helping me make better long-term decisions, or is it just selling more clicks?”

Would love to hear your thoughts on this. How do you balance staying informed with staying calm in your investment journey?