The Perils of The Press

OUR KEY role in helping clients is in protecting them from themselves. By that I mean shielding clients from their own worst impulses, keeping them from making short-term hasty decisions that can have a massively negative impact on their long-term planning and financial well-being.

That is easier said than done: it is hard to think of any arena that has as much conjecture, guesswork, estimates and forecasts than personal finance. It is enough to have most people completely confused about what they should do. All they know is they must do something because standing still and doing nothing is wrong, right?

Two examples showing the dangers of believing what you read were in both days editions of last weekend's Telegraph newspaper. Saturday's contained an article entitled "Is it time for investors to give up on Japan?"

Amusingly (as long as your own money isn't involved) the piece recalled how, at different times over the last 15 years, various investment experts and fund groups have called the next big bull market in Japanese equities. All have been wrong.

Maybe the article should have been entitled "Is it time for investors to give up reading the predictions of fund groups?" To be fair to the Telegraph, it was a brave article to publish in a sense, given that fund groups use the Money sections for heavy rotation advertising, with a bit of copy thrown in along the way.

What the article was really saying was "These fund groups and analysts don't have a clue. Please do however continue to treat them with reverence and cop a glance at their adverts, which can be found to the top, left, right and bottom of this piece."

In the Sunday edition a 'leading City analyst' (normally a good cue for you to run out the door) was saying that the last 10 years of miserable returns was proof that the decades long bull run in equity markets was over, and that bonds were now the new "black".

Which kind of reminds me of this very famous article from 1979, which said exactly the same thing and was exactly, spectacularly wrong.

But these are the experts, right? The experts must be right, right? So, feeling informed and in full possession of the facts, you act on these stories.

Except.... What if, yet again, the experts are wrong ? Remember, it's your money that's invested, not theirs. Give it the respect it deserves. Treat newspaper financial supplements as light entertainment, a welcome diversion from the more serious sports pages.

{The articles that are posted here are solely the opinion of Nick Lincoln. It is not individual financial advice and should never be taken as such. If you wish to discuss the issues raised in more detail, please make contact with Nick. If you ignore this smallprint and act on his opinion(s) without first seeking financial advice or reading at least 100 pages of Key Features Documents containing numerous risk warnings, you may well be struck down by lightning}