Two Things That Are Never Discussed in the Financial Media

There are two things that are never discussed on the radio, TV or on the websites of the mainstream financial media outlets. It’s ironic because they are two of the most important things for investors to understand:

1. Time Frames

2. Position Sizing

I don’t mean that these two concepts are rarely discussed – I mean they are never ever discussed at all.

The media focuses on the following instead:

1. Investment Ideas

2. Directional Calls

3. Breaking News

Those three elements are formulaically proven to gain and hold the audience’s attention and they’re important too, nothing wrong with that.

But position sizing is how good investors and traders keep themselves from making emotional mistakes – you may be holding the best stock in the world but if you own too much of it you will lose sleep and possibly react to signals that would ordinarily be more easily ignored. On the flip side, you can pick winners all day long but if you’re not invested in them to a degree that moves the needle, you’ve essentially failed.

And time frames are important in that they dictate which news or movements should matter to each individual. I’ve said before that if your investing time frame isn’t my time frame, I don’t care what you think about a given trade or posture – and you shouldn’t care what I think either. I’ll give you a recent example – long-term (measured in years and decades) I believe stocks are the only game in town and my preference is to be long the markets. But sometimes this long-term outlook is must become subordinate when the data we’ve found to be meaningful takes a turn for the worse. Barry’s done a pretty good job at communicating our growing cautiousness in his post Time to Reduce Equity Exposure from Friday. Because this is short-term cautiousness.

Anyway, you never hear about time frames and position sizing in newspaper articles or on the radio or TV, mainly because journalists and producers don’t typically do a lot of trading – in many cases their employers don’t permit them to. So it’s hard for them to understand how key these things are.

I’m optimistic that this can be changed and that we can begin introducing these discussions to a mainstream audience. A lot of the pros who do financial media would absolutely love to tackle these ideas and talk more about process sometimes rather than just stock picks.

We talk about this stuff all the time on the blogs, which is great, but I hope to see us sharing it more broadly with investors could benefit from the lessons we’ve learned.



This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here:

Please see disclosures here.

What's been said:

Discussions found on the web
  1. commented on Oct 02

    … [Trackback]

    […] Read More on on that Topic: […]

  2. Glock firearms for sale commented on Oct 14

    … [Trackback]

    […] There you can find 53364 more Information to that Topic: […]

  3. quality engineering commented on Nov 11

    … [Trackback]

    […] Read More here to that Topic: […]

  4. valid cvv2 commented on Nov 16

    … [Trackback]

    […] There you will find 50129 additional Info to that Topic: […]

  5. bmo services bancaire en ligne commented on Dec 20

    … [Trackback]

    […] Find More Information here on that Topic: […]

  6. Regression testing commented on Dec 20

    … [Trackback]

    […] Find More to that Topic: […]

  7. 메이저놀이터 commented on Dec 24

    … [Trackback]

    […] Info on that Topic: […]

  8. omega replica commented on Dec 31

    … [Trackback]

    […] Read More Info here on that Topic: […]

  9. rbc online login commented on Jan 13

    … [Trackback]

    […] Information to that Topic: […]