Speaking with great authority, they’re very opinionated on what’s ahead.
Their job title and who they’re working for usually determines what they’re going to say, so here’s a cynic’s guide to financial talking heads.
Economist: propagandist for the interests of their employer.
Often employed by bank or industry group, the economist will always be speaking with their employer’s interests in mind.
Take the often positive outlook of a bank economist.
Their positivity isn’t surprising, given their employer makes money when people take out consumer debt or get a mortgage.
For the industry economist, take former US chief economist at the National Association of Realtors, David Lereah.
Lereah hilariously issued optimistic forecasts for US real estate, even as the market crashed!
Stock broker: commission based salesman selling, no interest in making you money.
The problem for any broker is the fact they make no money if you’re not constantly buying and selling to generate commission.
They need to generate excitement in companies to encourage buying and pessimism in others to encourage selling, all with the intention of you moving money around for commission.
Then there’s always the long held suspicion they recommend a buy on what they’re selling and a sell on what they want to buy!
Financial journalist: entertainer and crystal baller, take Alan Kohler as an example.
Most people know Kohler and his graphs from the ABC News; there he’s an engaging and knowledgeable guy, and this engaging persona leads some people to follow his investment commentary.
Kohler runs an investment website where you could spend hours reading reports on everything from oil to property – hours of entertainment if you’re so inclined, but what’s the value?
Kohler suggested the share market could fall 40% in 2009; it actually went up 40%.
Similarly, he predicted a ‘sharp drop’ last year, yet the market climbed nearly 20%.
Hours of entertainment, but missing those gains would have been hazardous to your wealth!
Peter Mancell is a director of Mancell Financial Group and FYG Planners AFSL/ACL 224543, www.mfg.com.au This information is general in nature and readers should seek professional advice specific to their circumstances. Need help with your financial your financial future, we think we’re one of the top financial advisors in Australia.
