Don't React to Media Hype

Following the Media...

If you are stressed trying to get the scoop on all of the noise out there in the media maybe you should think about what has been happening over the last 6 months. Remember that the media needs to fill up pages of their websites/publications in order to sell advertising. If you keep following their stories and act on the current media report you can get caught up in the frenzy. And that's exactly what they want. I suggest that you should keep a handle on the big picture.

A few months ago if you were watching and following you might remember that folks were reporting that commodities were going through the roof and that was the place to be. The more the media hyped the commodities the more various mutual fund providers came out selling their commodity laden funds.

As we look at the commodity market today these speculative reports are now looking a little less attractive with the spiraling down of oil and other hot commodities. In fact Bloomberg data reported in October that commodities in October posted their biggest monthly decline since at least 1956.

The media now explains this surge and decline of prices as a bubble bursting of the market. Yet a few months back, the argument from many of the same publications was that commodities' growth was perfectly justified by the fundamentals and suggested that small investors should get in line to buy.

As prudent investors we should be aware of the media hype and what can appear to be of great significance at the time can vanish from a favored view. As the free market factors the information in the prices will fluctuate but we must remember that the long term view should be our mantra because the short term view is only a blip on a much larger radar screen.

As I mentioned earlier the primary reason for these stories is to fill the space they need to publish their media.

It doesn't do investors any good to be reacting to what they read or see everyday in the media because it has been proven that the markets will do their job and produce positive results over the long term as long as their portfolios are properly diversified.