Dan Gainor Media And Information Bias
- Dan Gainor Media And Information Bias Peter Morici: The reality is though is that Mr. Obama would be limited to spending only as much taxes come in so would force a balanced budget almost immediately that is a manageable proposition.
- in fact after a very few very bad days after the flash crash this August, the market began climbing back much of the time according to analysis done by my staff at Sound Income Strategies was it was due to investors covering what’s called short positions in the stock market.
- My registered investment advisory firm Sound Income Strategies is already held to a fiduciary standard.
- know financial media, financial advisors, financial mutual funds, stock market.
- Why, however does this supposedly objective financial media so often fall in the habit of serving the same pro market spin to the public or as Dan Solon bluntly put it, serving as a shill for the securities industry.
- It stems from the fact that a great many articles written for financial publications or broadcasts aren’t written by financial experts or qualified market analysts.
- The staffs of these two agencies discovered that Futures contracts in Chicago specifically something called the E-mini futures had a liquidity crisis and it caused the price drop of five percent within four and a half minutes.
- According to a two thousand and fourteen Gallup poll only forty percent of Americans surveyed said they trust the media’s ability to report the news and information fully, accurately and fairly.
David Scranton: Hi and welcome to this week’s installment of the Income Generation, I’m David Scranton your host. As always the primary purpose of this show is to provide you with useful information thoughts and financial remedies to assist and guide you through a time in your life when financial missteps could have a much larger negative impact than when you were younger. Each week I share some of the insights and expertise that I use in my financial practice and bring them to you as either food for thought or actionable items for financial or investment concerns you might be having. Many of the times people don’t even realize or recognize what these concerned should be, they feel as though they’re doing everything right. You might be watching the nightly news, you might be reading financial publications, sitting there with your broker or a financial advisor on a regular basis to make the most of your situation. But history has still shown that time and time again the information distributed to you by various outlets turns out to be wrong or if not totally wrong just ignores some very important facts. So why is it so often wrong or incomplete? that’s what today’s show will help you discover and I’m sure that it will get you thinking and maybe even rustle some feathers of people that I occasionally run into in my own business, and that’s fine with me. Our guest today is an expert on the subject of media bias, he’s vice president of Media and Culture at a much heralded organization. Watching the media and what you’re being told, they listen and watch word for word for truth then they make the findings available as a public service. So as much as the news and the media are in many ways supposed to be your source of information or even the public’s watchdog, as it turns out the watchdog actually needs a watchdog. As you may know America has a watchdog with the Media Research Center so you’re in for some great insight and perhaps even some disturbing examples today of abuses in the media. abuses that you know we’re exposed to every single day, a little later in the show I’ll be interviewing Dan Gainor who for ten years was head of the division of the MRC. The MRC exist solely to be the watchdog for you. I’ll see if I can get Dan to pull the cover off some of the machine that shapes public thoughts, the media themselves. I’ve known Dan for a while but I’ve never had the opportunity to have this discussion with him, I look forward to his informed insights and depth of understanding of what either is intentional misdirection or complete dishonesty. And what may just be the nature of information distribution. Marti Johnson’s also back this week with a special report on why the media like so many other businesses may be flawed or missing their potential to do good. And most of the media is a four profit business whether it’s a newspaper with a two hundred year history, a major television network or recent blog that you read. The main goal is to make money. Actually, in many cases informing you is a bit lower on the list, how much lower? Well by the end of the show we’ll have a better idea of where we rank in the media’s eyes. Last week we had an economist Peter Morici on and he discussed some of what drives market expectations and its expectations that often drive investment prices and returns.
Peter Morici: The reality is though is that Mr. Obama would be limited to spending only as much taxes come in so would force a balanced budget almost immediately that is a manageable proposition. So to say the Republicans are responsible is absurd but unfortunately, who’s ever present in the United States gets to set the terms of the debate by virtue of the bully pulpit. And he’s got America convinced that somehow that we’re going to renag and welch on our debts. Nothing could be further than the truth, the only person that can determine whether we renag or welch on our debts if we don’t raise the debt ceiling is the president of the United States.
David Scranton: Well, with a constant barrage of news twenty-four seven and even phone apps today that are updating and informing us on a constant basis it would be almost impossible for the information distributed. Whether correct or not to not work its way into the market psyche and even yours, this of course has a huge effect on us all. As for myself I’m a student of the markets and I sometimes sit dumbfounded as I listen to a reporter discuss why the markets moving up or why the markets moving down. the reasons they give it times I think are so oversimplified as to be comical, I often wonder if they’re intentionally oversimplifying or if they purposely omit discussing the most likely causes of market moves for fear that you at home simply may not understand. Let me give you a simple example, in August of this year the stock market moved significantly lower and what the media called a flash crash. This event included one of the top ten worst days in the history of the Dow Jones Industrial Average. Since the talking heads on television always promised to deliver and provide the answers immediately they had to give viewers a reason for the drop on the spot. My experience is that they seem to have a list of go to explanations for most market moves, this time they pulled out the old high frequency trading and lack of transparency as being the cause. They basically blamed electronic trading. They quickly were airing conversations to viewers about market reforms to help improve these causes and conditions. Whether the news outlets were right or not didn’t matter, all the folks at home who digested this as a cause were fed information that is now part of their beliefs to one degree or another. The reasons given much later on when analysts had time to look at all the mechanisms that played into that historical day ended up being much different. And that is still being studied, I thought of a similar event back in May of two thousand and ten. Which had a one thousand point flash crash. You might remember that back then the media also pointed the same culprits, high frequency traders. Enough time has passed and research conducted since that invent they have come up with an entirely different set of reasons. In fact, the conclusion the SEC came up with along with the Commodities Futures Trading Commission specifically stated that high frequency trading did not cause the flash crash. The staffs of these two agencies discovered that Futures contracts in Chicago specifically something called the E-mini futures had a liquidity crisis and it caused the price drop of five percent within four and a half minutes. Did the news outlets issue a correction or even an apology? Not that I heard, that was yesterday’s news and what I describe briefly earlier is not something most viewers would quickly grasp or tie together. Perhaps they’re afraid to give too much information because they don’t think their audience can handle it. Today’s show we’ll talk about this and even more sinister motives, that’s one of the reasons I’m here to dig deeper than a soundbite or quickly fabricate a reason to explain just the market move or the day. in fact after a very few very bad days after the flash crash this August, the market began climbing back much of the time according to analysis done by my staff at Sound Income Strategies was it was due to investors covering what’s called short positions in the stock market. These trades have the same effect as any other purchase so of course, the market begin to rise. Now this again wasn’t explained as one of the possible reasons on anything written or aired that I have seen since then. I guess they didn’t think you’d understand, I remember hearing instead that China suddenly was no longer a concern and that the Fed was expected to raise rates and that was the reason for the original drop. But the market climb is because the Fed will probably be on hold for a while now and of course, the old standby excuse unemployment concerns. If you have any money at all you can rest assured there are people who will be trying to relieve you of some of it? Now I’m not suggesting necessarily in an illegal way we all know there are people who will steal. What I’m talking about today though is legal businesses that bombard us all with dubious images and definitions of what’s best what’s normal and what we need to do to live happier more successful lives. One example, I like to show is legalized fantasy sports betting. If you haven’t seen these commercials for these fantasy sports companies which fits almost every definition I know of gambling well then you’re lucky. On their commercials which typically air during football or baseball games they have one person after another talking about how for just a few dollars entry fee they were able to win thousands of dollars playing. Their all extremely happy, they’re full of energy and the commercials urge you to get into the action along with them. The underlining message is that you can’t lose now, maybe these commercials and the business practices of this industry shouldn’t bother me as much as they do. But when I see the advertisements it reminds me of the ads and business tactics of discount brokerage firms and online trading sites. the message their commercials constantly send is that it’s so easy to invest a baby can do it , you’ve all seen those I’m sure. Another ad looks to get people to buy more by convincing them that if they’re like the winner in the commercial when they have an idea they also need to act upon it right away. Yet another sends the message that all you really need is the right charting tools you know instantly take control over your finances. Much like the ad for one week fantasy leagues which may not specifically be asking the viewer to gamble, I feel these discount broker ads are suggesting the same thing. They craft the message that it’s easy, it’s fun, everyone’s doing it and everyone’s making money doing it it’s almost like they’ve even taken scripts directly from the cigarette ads of yesteryear. You know if you smoke well you’ll be cool or in this case if you day trade you’ll be cool. Let me mention another reason for us to all be upset, when a product portrayed as glamorous you know yet it has the potential to do as much harm as smoking or online trading. The company and perhaps even the network is acting irresponsibly but it’s you as a citizen who gets stuck with the bill in one way or another, think about it. Both the tobacco companies and those touting these ease of do it yourself investing have cost Americans billions, that’s whose footing the bill for irresponsible misrepresentations of what you should expect. Why would large T.V. networks not instead have more wholesome advertisements? For the same reason Congressman may be more likely to act on behalf of lobbyists than their constituents, you know there are lobbyists pursuing them and pushing them, incentivizing them to act on their behalf instead of yours. It’s similar with T.V. and magazines paid advertisers are far more important than non-paying viewers. I’ll even go as far as to say it affects the very content of the supposed new shows, I hope to dig deeper into this with Dan Gainor later in the show. My registered investment advisory firm Sound Income Strategies is already held to a fiduciary standard. I believe that brokerage firms which are related business should also be held to the same standard, this is why I get so fired up when I see commercials that are encouraging people to gamble with their future. They should all come with a warning much like packs of cigarettes today that say Don’t Try This At Home. In fact, right now President Obama is making a huge push to have all advisors including brokers become fiduciaries when investing client’s retirement accounts. I’m a managing member of a registered investment advisory firm as I said a moment ago so I’m already held to that fiduciary standard, in fact, I’d lose my license and effectively be out of business if I didn’t put my clients first. Holding brokers and other advisors and hopefully one day commentators also to a fiduciary standard I believe is a good thing because it’s not so easy that a baby can do it. So it may be a rare moment when I agree with one of President Obama’s initiatives but I hope in this case that his push on this topic is successful. You heard that right, I agree with you Mr. President all advisors need to be held to the high fiduciary standards of putting their client’s interests above their own. Many types of financial advisors don’t have to under current regulations so make sure you’re working with an advisor that does. Dan Gainor currently runs the Business and Cultural Institute at the MRC but has also been the T. Boone Pickens fellow as well as the director of the free market project in the past for the MRC. Dan, welcome to the show.
Dan Gainor: Thanks Dave, it’s a pleasure.
David Scranton: First of all, can you tell us what the Media Research Centers primary mission is?
Dan Gainor: Well, we’re a conservative media watchdog and it’s our job to both identify and then neutralize left wing bias in the media. We’ve been around for more than twenty-eight years and we are probably the largest archive you’re going to find this side of the Library of Congress for video. we’ve got I think the last number is close to six hundred thousand hours of video and that means that we’re monitoring ABC, CBS, NBC, CNN, Fox, MSNBC and not just for news but also for entertainment. because one of the things we found over the years is that the bias in the media is in all aspects of media and you’ll see that…you’ll see that it attacks on conservative issues, you see it attacks on business men you’ll see you know T.V. shows where there were always targeting businessmen as villains. And the free market system and our country as somehow evil but one of the things we’ve learned over time is that essentially American public has lost faith in the media and there’s good reason for that.
David Scranton: Alright, fair enough that’s a great explanation for viewers you know why do we need a media watchdog and why can’t the media…?
Dan Gainor: I’ve been… I spent decades in news. I mean I spent decades in the news before I came into this job and I can tell you that on every major issue of the day journalists have opinions that they let creep into their news copy. that’s who their friends with, who they go to… who they socialize with, how they vote that all creeps in and it ends up undercutting people’s opinion. If you look at the opinions going year by year using the Pew Center for People in the press the opinions of the major media have been pretty much on a steady decline for years. And the reason for that is people now have a better sense of what’s going on in their media, they turn on T.V. they can then watch it and Twitter. Watch it on Facebook and then get real time reaction and when they do that they realize just how disastrous what they’re being fed really is. And the net result is if they’re… if who watches the watchers?
David Scranton: Right, good question. That’s absolutely correct and obviously you’re one of the people that help us with that and we’re grateful for that. Let’s point the conversation now to the interested parties that are associated with you know many of the shows that are consider financial shows or even financial news shows. Where I’m not sure the American public realizes that unlike the Internet everything on T.V. is paid for by one group or another. Can we talk about that for a moment?
Dan Gainor: Oh yeah sure, and I mean there’s… when you get into niche markets, financial shows, sports shows you know that’s were really I guess you would say some of the worst media cronyism is. Because I mean you know you’re… it’s in your best interest to not alienate the very people who are paying your salary and then you get… you know so that crops up. Now when you’re… when you’ve got an ABC evening news show and you know you’re touching on a lot of different topics you’re going to run less maybe into advertisers. But if you’re talking about something happening in the business media then you’re really running into a much more narrow market where financial advisors, mutual funds, everybody involved… You know they’ve all got a piece of the pie and you’re expecting whoever you’re watching to be a neutral observer, they’re not.
David Scranton: yeah so who else besides financial advisors, mutual fund families are the advertisers in these types of shows that might influence the decision of a reporter or someone else?
Dan Gainor: Well, I mean I think even before you get into that you’ve got to think also about corporate ownership. it’s a very finite number of organizations that own you know that own media so you’re looking at… just use NBC for example, NBC is MSNBC, is CNBC with its corporate owners you know ultimately Comcast. Are you going to really you know… and that means because their extremely reliant on cable, you know couple of those shows, couple of those networks wouldn’t survive at all without cable. And then of course they’re owned by cable, so you’re going to expect them to be you know have their advisors, their analysts come on and talk about cable. And say oh yeah we think the future cable is bad no, of course not, because they’re you know they’re too closely tied to that market. You know so then you go in to start looking at advertisers and it’s the whole universe of you know financial media, financial advisors, financial mutual funds, stock market. you know the… you know from soup to nuts and so you know… and you can even listen in you know when you’re watching the show sometimes you’ll hear oh, we just recommended this stock and you know two minutes later you’re hearing an advertisement for a company that’s related to that company.
David Scranton: Got you, so you wonder why and then all of a sudden you look back later and you think oh, I get it, it makes sense. Yeah, it’s so true and I want to talk more…
Dan Gainor: Yeah and it doesn’t necessarily mean that they’re compromised you know it just means that you really got to take a… you’ve got to really take a John 20:18.
David Scranton: And of course, you know with any public traded company if the advertiser is publicly traded their number one fiduciary responsibility is to their shareholders. And it’s very easy for you know a reporter writing an article or doing a news report to get influenced by what they say and right after the break we’re going to talk more about that. We’re here now with Dan Gainer talking about some of the issues that we have to deal with in the news reporting world, in this field and how some of the things that you hear and read about financial advice and so on could be skewed more toward the profit motive of a particular person. And maybe just a little bit less toward what’s truly in your best interest. We’ll be right back with Dan Gainor. We’re here today with Dan Gainor and we’re having a frank conversation about how reporting specifically financial reporting, be it through published media or through television is influenced by the likes of advertisers and other interested parties. Dan you know you’re talking about the advertisers per say, so it sounds like you’re saying if an advertiser for a particular show for example is a mutual fund family. Then it’s likely that you’re going to hear a lot of positive things about mutual funds for example, is that correct?
Dan Gainor: Or if nothing else you won’t hear the negative. I mean that’s you know that’s just the reality I mean you know everybody has to pay the bills and so if a particular show is funded entirely by mutual funds you’re not going to hear that that shows saying oh, well mutual funds are a bad bet. Because advertisers will flee you know if you watch the evening news shows you don’t see a lot of stories generally speaking attacking the whole drug industry. The new shows are under you know are funded… there are a lot of advertisers that are drug manufacturers it’s just not one of the things that they you know crusade against. So when you’re looking… when you get to the basics really it helps to understand how do you kind of make the secret sauce to this journalism? And while the economy started doing a downturn in the last several… you know with two thousand and seven journalism never really stopped and as a result you’ve seen massive decline in number of working journalists in major cities. We’ve lost a lot of major dailies, there’s a lot fewer people reporting there… and then there’s a lot of pickup of what other people do so I mean all it takes is one bad story sometimes and the next thing you know that bad story is spread like a virus across the internet. And so because journalists are not spending a lot of research time double checking it you know you really have to be well informed and to give an example how bad this can really be. You’re not going to get the most advance knowledge from journalists, several years ago I’m a member of society professional journalists which is not mandatory. But it’s a good organization and I took economist Brian Wesbury, a great guy. Took him to an annual conference and we had you know a meeting talking about how to teach economics to journalists. And there’s about twenty-six, twenty-seven journalists in the room and Brian got it that he by speaking to you know that smaller number. He was speaking to hundreds of thousands or millions of people and so the first question he asked he says how many of you have had advance training in business or economics? One person raised a hand and he just went off and he’s a very nice guy but he was just stunned by how embarrassingly bad this was. And he said you know how are you supposed to cover business and economics if only one of you have ever had any training in it?
David Scranton: And Dan isn’t it true…
Dan Gainor: That’s what they don’t see what’s easy to pull the wool over the eyes of….
David Scranton: Dan isn’t true also that a lot of times writers to gain experience might write about sports for a while and then write about something else and then maybe fall into finance. You know is that a big part of the reason why perhaps that there are not experts in that particular area as most readers would think?
Dan Gainor: Well you know most journalists are generalists. I’m mean you know not… maybe when you get to the Wall Street Journal level you know you’re not talking about that. But you know there are people… journalism is a trade not a profession like medicine where everybody necessarily went through years of study. Lot of journalists didn’t even have… didn’t get a journalism degree and even then a journalism degree is how to do journalism not how to do economics, not a study of business. And frankly, when you kind of scratch the surface of most journalists they’re not business friendly. I’ve always you know joked when you go to work at a news organization, the news organization isn’t even friendly with its own business department. You know the people they don’t like the advertising in circulation people the people who help pay their bills, the only time they talk to them is at the Christmas party. So you know to expect them to you know to turn around and be friendly to your business you know it’s just not going to happen.
David Scranton: Right, right. You know in the two minutes or so we have left Dan, can you share with our viewers some egregious examples or at least one egregious example of… in the financial industry that you can recall.
Dan Gainor: One of the worst examples and I mean this is foundational to the economic collapse of two thousand and seven, two thousand and eight is the Fannie Mae Freddie Mac scandal.
David Scranton: Sure.
Dan Gainor: For years Wall Street Journal led the charge saying that this was an organization and an operation that was destined for chaos and the American public would be on the hook for billions and billions of dollars. New York Times picked up on it much to their credit, Washington Post picked up much to their credit and there was almost complete and utter silence on ABC, CBS, NBC, CNN to the point where Charlie Gasparino who you know… I remember coming out at the time and he was railing on the networks and saying that the reason why they’re not talking about this is bias. But here’s the reason why? Because the journalists were convinced that Fannie Mae, Freddie Mac helped ordinary you know particularly poor and underprivileged people get mortgages. So they would go to talk to their buddies on the Hill who invariably were pro Freddie Mae and Freddie Mac and they’re telling them oh, there’s nothing wrong. So it ends up being this enormous disaster costing taxpayers you know hundreds of billions of dollars. And only when everything really hit the fan did the networks even at all attempt to cover it.
David Scranton: Yeah and anyone who owned Fannie Mae or Freddie Mac stock back then actually knows what’s happened to that is there’s been a huge loss of wealth for shareholders. So you’re absolutely correct.
Dan Gainor: yeah and I mean that’s you know where is the responsibility for that if you’re an investor and you rely on the regular media to tell you what’s going on then you’re just a (unclear 28:18) fool.
David Scranton: I love it a dazzling fool. Alright well, so for viewers obviously you know you don’t want Dan Gainor to refer to you as a dazzling fool so pay attention to different sources and as I would say always ask the question why. You know why is it something’s being touted for us? Marti Johnson’s going to be here in just a minute and actually talking about that as part of her report. So Dan, I want to take this moment to thank you very much for being part of our show today as usual.
Dan Gainor: Well thank you very much, I enjoyed it.
David Scranton: Okay and we’ll right back in just a minute with Marti, stay tuned.
Marti Johnson: Thanks David, as a media professional myself for many years I’ve always prided myself on my own journalistic ethics and professionalism and so too have the many colleagues I’ve had the privilege of working with. But after hearing today’s guest it will probably come as no surprise that trust in the media as a whole is at an all-time low in this country. According to a two thousand and fourteen Gallup poll only forty percent of Americans surveyed said they trust the media’s ability to report the news and information fully, accurately and fairly. The interesting word in that survey question is ability, because in truth biased reporting and media spin usually aren’t caused by one lone wolf reporter or an editor with a personal agenda. More often, they’re the result of fundamental flaws in the way mass media works and operates. And that’s especially true when it comes to the financial media, today we’re going to take a closer look at those flaws which support the point financial author Dan Solon was making when he wrote to be a successful and responsible investor you need to ignore most of what is in the financial media. Well everyone is aware that the mass media has changed dramatically in the past ten to fifteen years, prior to that the majority of us relied on daily newspapers, T.V. and radio as our primary sources of news and information. the internet changed all of that and today we’re bombarded with headlines, updates, breaking news alerts almost constantly from our laptops, desktops and yes, even our cell phones not to mention the T.V.’s and the radios. Unfortunately, the dramatic increase in the presence and variety of mass media in our lives has only served to enhance the flaws that threaten journalistic objectivity, not diminish them. As a result we’ve seen an equally dramatic increase in the pervasiveness of hype and spin and a decrease in the presence of balanced and truly objective reporting. But what exactly are the flaws driving the situation and why are they even more prevalent in the financial media? To a large extent they stem from the simple fact that most of the outlets in the business of reporting news and providing information are in fact businesses. As such, they’re competing against each other businesses providing the same services competing for readers, viewers, subscribers and of course, advertisers. With so many news sources in the competitive mix and the internet and cable T.V. accessible to viewers and readers around the clock. All of these businesses are compelled to deliver fresh and updated content twenty-four seven and to try and distinguish themselves from competitors. As a result the lines between news advertising and infotainment have become increasingly blurred and modern journalists are under more pressure than ever to put pleasing their bosses and growing their businesses and their brands ahead of serving the public. The result, very often is reporting the lacks objectivity and a spun to the liking of an individual and interest group or an advertiser. But this flaw runs even deeper when it comes to financial media, it begins with the fact that the heads of major financial firms on Wall Street are financially obligated to their shareholders first and to their customers and clients second. They have a legal obligation to maximize shareholder value in part by keeping customers invested in the markets as much as possible. People are more likely to invest obviously and to stay invested if they’re optimistic about the markets and believe they’re moving upward. As a result Wall Street C.E.O.’s and the people who work for them have an inherent need to sell positivity. And to always speak optimistically about the markets regardless of how often economic realities are moving or the markets might be trending. Why, however does this supposedly objective financial media so often fall in the habit of serving the same pro market spin to the public or as Dan Solon bluntly put it, serving as a shill for the securities industry. One reason, is that most financial media outlets are corporate owned and therefore obligated to some extent to help that Wall Street C.E.O. please shareholders by selling optimism. That’s why most of the high profile market analysts you see on the internet and cable T.V. always seem to be touting stocks. Pushing them regardless of market conditions while ignoring the very existence of other investment operations and options. Their opinions aren’t based on independent objective research but on in-house sources and usually there’s no firewall between the company’s research department and its ownership and its advertisers. Most of these analysts know that if they contradict the company line they run the risk of losing their high profile, high salaried jobs. Of course, the overcrowded and highly competitive nature of today’s twenty-four seven media that I just spoke about is also part of the problem. In the midst of this fast paced competition, financial news sources today like news providers in general increasingly fall in the habit of simply pulling stories off the wire to use an old inside ball game journalistic term. They repackage news content already circulating rather than devote resources to developing their own that’s why what you hear from one financial source is so often the same thing you hear from another financial source. They haven’t done separate research and reach the same conclusions by coincidence, they’ve simply gotten all of their information from the same place. And there’s still another issue specific to the financial media industry that makes objective reporting and finding that information difficult. It stems from the fact that a great many articles written for financial publications or broadcasts aren’t written by financial experts or qualified market analysts. Rather they’re contributed by professional writers and even when the writer is highly qualified and very experienced he or she may not have a single area of expertise. Their resume may include everything from athlete interviews for Sports Illustrated to travel articles for Cond Nast this kind of broad based background is common in journalism. You can always trust a good writer to do research when putting together any story but the sources he or she uses to gather their information vary. And unfortunately, it’s quite common for writers contributing to financial publications to use the most convenient sources which very often happen to be among the publications advertisers. The fact is that successful magazines, programs and websites get the majority of their revenue not from readers, viewers and subscribers but from advertisers. And who do you suppose are financial media’s biggest advertisers overall? At the top of the list not surprisingly brokerage firms and mutual funds, obviously these are going be more… these sources are going to be more than happy to provide the reporter with information for his piece. But will it be objective information? Probably not, more likely it will be information that again conforms to his company’s inherent need to sell optimism and to please shareholders by putting a positive spin on the stock market and market based products and strategies. That’s why it’s so important for our members of the Income Generation and all investors today to understand that so much of what bombards them on the internet is not really objective news and information. Particularly when it comes from financial news, rather the majority of it is spin biased rhetoric and disguised advertising. the result of fundamental flaws and the very framework of today’s increasingly convoluted and highly competitive mass media.
David Scranton: When it comes to your money you always have to ask the question why? As in why is this particular advisor or this particular reporter recommending the approach that they are to me? This is especially true in the financial services industry as we’ve seen today. Some of the reasons to be weary of what you see and hear are that so many of the so-called experts on T.V. and the magazines and even professional advisors invited to your kitchen table to help. Have a vested interest in promoting whatever sells their products or services, this lesson extends to all areas of your life. So when you’re hiring a professional be it a landscaper or a contractor or even a lawyer or doctor remember to ask yourself why? Why are they recommending what they are and is it really what’s best for me? One of the examples I like to use when speaking to my clients is as follows. Let’s say that I told you I were having some back pain and I went to four different medical professionals to get help. Now, I ask how many different solutions do you think I might get from four different medical professionals? Well, what if I told you that they came back with four completely different recommended treatments. At first, you might be alarmed but then if I told you that one was an orthopedic surgeon, one was a chiropractor, another was a physical therapist and perhaps the fourth was an acupuncturist. Now it would actually make sense, this is because in the medical field and as well as every other field. Everyone has an expertise and they’re likely to want to help your issue with whatever they can provide and subsequently get paid for. You know there’s a saying when you’re a hammer every problem looks like a nail, so in the medical example knowing the why the different experts are recommending what they are is very, very important. The same is true for the financial industry, and I’ll include investment analyst appearing on T.V. in this group also, ask yourself why they’re recommending what they are indeed recommending and maybe because that’s what they’re getting paid for recommending. Just like you’ll probably never see a time when a stock broker says stocks are bad investments you’ll probably never hear a real estate broker say real estate is a bad investment. Now, when it comes to your health, most people of the Income Generation understand the differences between these four various medical professionals and what they do. Unfortunately, differences are not as well understood in the field of financial services, people tend to paint the financial industry and financial advisors with one broad brush. They look at all advisors being very much the same even though they know that doctors for example are very much different. In reality, there are many different types of financial advisors just like there are different types of doctors, lawyers, construction contractors and even beauticians. You want to make sure you go to the one who is a best fit for the why for which you’re seeing them. This is important and it will soon be designating an entire show to determine the type of advisor that’s right for you and as I said earlier preferably one that’s required to act as a fiduciary. So you could be even more comfortable that they’re acting on your behalf. You know in my personal practice Sound Income Strategies, I talk to prospective clients all the time who are currently working with stock market based advisors. Often these advisors work for one of the big brokerage firms but at times they’re independent. Many times these prospective clients are surprised to find that they have a majority of their money in the stock market, I’m generally not surprised if you think about it this is why stock brokers are called stock brokers. They typically search to find solutions with the limited answers found within the stock market. Like I said earlier, if you’re a hammer every problem looks like a nail, today we got sit down with Dan Gainor and learn about all the good work being done at the Media Research Center. I for one am grateful the MRC exists and his role as media watchdog, I’m personally happy to have shared this resource and to help the Income Generation understand that this information is there for you. I want to also thank Marti Johnson for her reporting, Marti’s report was very important for all of us to understand the role that advertisers play in shaping what makes it on to business news. Now I cannot wait for next Sunday when we have conservative icon and bestselling author Steve Forbes on to discuss how three things are going to potentially save our country. Repealing Obamacare, redesigning the tax code and reforming the Federal Reserve he says it’ll bring our nation back out of its Malays and on its track to growth and prosperity.
Steve Forbes: And in terms of a stable dollar you know you once… the dollar works best, money works best when it has a fixed value. You know money is not wealth, money measures wealth the way scales measure weight or ruler measures length and money…
David Scranton: Forbes has written a new book on the subject called Reviving America. I’ve just finished reading it personally and I look forward to sharing this great thinker with you. if you haven’t signed up yet for a complimentary special report titled The Income Generation which allows readers to discover many answers to their invest the questions. Sign up now at The Income Generation dot com, you’ll discover a wealth of useful ideas for financial security that you may have never known existed. Well that’s it for today, I’m David Scranton you’ve been watching The Income Generation and we will see all of you next week.