Part II: The Dilemma of “Paying Attention”

Thursday, November 13th, 2014

Good Morning Relaxing Retirement Member,

In light of the daunting lifelong task you face of managing your money to provide the lifestyle sustaining income you need without running out, the question I’m often asked is what should I be paying attention to?

As we discussed last week, this is a very good question that has become more and more prevalent today given 24/7 media coverage of financial markets.

In your desire to “stay on top of things”, it has become harder and harder to determine what’s relevant, what to pay attention to, and who’s correct.

As I revealed last week, had you clicked into The Wall Street Journal’s home page on the morning of Tuesday, October 28, 2014, here are the headlines and bullet points you would have come across in your quest to satisfy your desire to “stay on top of things”:

  • Stock Futures Up on Hopes for Fed, European Gains
  • S&P to Gain 10% in 12 Months: Goldman Sachs
  • Pursche: After a Drop, Stocks are Going Up
  • What To Make of This Roller Coaster Market
  • 3 Reasons to Expect a 30% Market Meltdown
  • European Stocks Rebound
  • What’s Next for China’s Foreign Reserve Fall?
  • Protect Your Portfolio with These 5 Basic Hedging Strategies
  • Elon Musk Warns of our ‘Biggest Existential Threat’
  • Home Prices See Largest Annual Jump Since 2005
  • Fed Will Hold Market’s Hand as it Ends QE3
  • Don’t Let a Downturn Undermine Retirement
  • Buffet Still Optimistic About America
  • Hulbert: Be Ready for a June Swoon in the Markets
  • Why Dow Transports Index is a Crystal Ball
  • How to Retire Early – 35 Years early
  • 10 Stocks to Buy
  • Best Performing Mutual Funds

These are the exact headlines that appeared that morning.

Questions For You

The questions I asked you to ponder before this week were:

  • Do you notice a pattern? And, if so, what is it?
  • As a result of reading them, do you feel as though your desire to “stay on top of things” has been satisfied?
  • Did you reach any financial conclusions that you were able to act on?
  • Have any or all of them helped increase your financial confidence?

So, what do you think?

Let’s begin today with question #1 by identifying some patterns. Do you see any?

If you step back and remove any sense of emotion, and objectively read them for a moment, the first thing you’ll notice is that they’re not facts.

They’re ALL opinions.

Even the first one which states that stock futures are up. That may be a fact, but suggesting that all stock futures prices are up due to hopes for Fed and European gains is an opinion.

Are there only two potential reasons why millions and millions of investors all around the world have driven up demand for stocks before the day’s trading session begins?

Of course not! But, they can’t list dozens of potential reasons and fit them into a concise headline as they’re required to do by their editors.

This is a very important point. Due to space and time limitations, and of course our limited attention spans, all forms of media have to severely condense the information they put in front of you.

By definition, that means they either have to generalize to provide the broadest possible view, or be very subjective and only isolate one facet of the story.

This is a really important point to internalize. Without giving it much thought, writers’ subjective opinions are interpreted as “fact”.

Because they’re “in print”, we’re conditioned to acknowledge them as fact.

Pattern #2

The second pattern you can’t help but notice is that these headlines are written, individually and collectively, to conjure up a visceral feeling inside of you that the world is completely out of control, that financial markets could come crashing down at any moment without notice, and that, in turn, your financial future is on thin ice.

And, the only rational conclusion you should come to is to continuously “tune in” and pay attention so you don’t miss out and get burned.

Try to read this combination of headlines again without feeling this way:

  • What To Make of This Roller Coaster Market
  • 3 Reasons to Expect a 30% Market Meltdown
  • What’s Next for China’s Foreign Reserve Fall?
  • Protect Your Portfolio with These 5 Basic Hedging Strategies
  • Elon Musk Warns of our ‘Biggest Existential Threat’
  • Don’t Let a Downturn Undermine Your Retirement
  • Hulbert: Be Ready for a June Swoon in the Markets
  • Why Dow Transports Index is a Crystal Ball

Remember that the financial media can choose to say anything they want to say. Within very broad guidelines, they have total freedom.

If that’s true, why would they choose to write THESE headlines and bullet points?

Stop and think about that for a moment. Why do they choose these headlines over every other possible alternative?

With no disrespect to their way of making a living, the reason is because they’re not in the business of managing money or providing advice.

That’s not how they’re compensated.

All forms of media are compensated through advertising revenue. Companies around the world pay billions of dollars to run advertisements to market their businesses. And, they have an infinite amount of choices these days.

How do all of these companies determine where to spend their advertising dollars?

They spend it where they believe they can reach the largest audience.

So, the goal of every financial media organization is to have the largest audience in order to entice every potential advertising customer (company) that they have the largest audience for the advertising customer to reach with their message.

Given this, they pay professional copywriters (not money managers) very, very well to write headlines and “teaser copy” that will continuously capture and maintain your attention.

And, they do a brilliant job of it. Go back and read the list of headlines again and rate them on a scale of 1 to 10 on their ability to capture your attention.

I think you’ll agree that most of them score a 10!

Again, I don’t discredit the financial media as a business venture, nor do I question their right to do what they do to make a living as long as they don’t use force or fraud to get their results.

My interests are in helping you develop and maintain the highest possible level of financial confidence so you can do everything you’ve always wanted to do in your retirement years without worrying about money.

Unfortunately, the financial media’s goals are not aligned with your goals so you have to have your antennae up and be highly aware at all times of the impact their subjective messages can have on you.

Questions 2, 3, and 4

Now that we’ve laid this groundwork, let’s examine the next three questions I asked you to ponder in the next edition of The Retirement Coach Strategy of the Week.

I can’t stress how important I believe all of this is. Stay tuned!

Committed To Your Relaxing Retirement,

Jack Phelps

The Retirement Coach

P.S.WHO do you know who could benefit from receiving my Retirement Coach “Strategy of the Week”? Please simply provide their name and email address to us at Or they can subscribe at appreciate the trust you place in me. Thank you!

(The content of this letter does not constitute a tax opinion. Always consult with a competent tax professional service provider for advice on tax matters specific to your situation.)