Financial Media Wakeup Call: The Big Disconnect

I was having a discussion with the CEO of one of the largest financial media companies in the country yesterday.

A few points I made:

1. The population of DIY investors who want to actively trade their own stocks each day and need news that caters to them is small and shrinking (their estimates are that the number is 3 million people in the US). To focus primarily on this segment misses the bigger picture – the 8.6 million millionaire households that truly need help with longer-term planning, not stock ideas. See the below slide from Chip Roame’s Tiburon CEO Summit last year:

SLIDE MILLIONAIRES

2. But this is how most financial media properties are geared – everyone’s doing sites and apps and content about which stocks to buy and sell and how to react to economic / earnings news. It’s pretty crowded and when people try to stand out in crowds they tend to shout, post things in ALL-CAPS and engage in hyperbole.

3. The real wealth in this country (US investors have $59.4 trillion of net worth excluding their houses) doesn’t give a shit about whether or not they should buy Netflix – they want content, insight and information that helps them with planning, portfolio construction, asset allocation and true investing – not just trading, trading, trading.

4. The financial media is irrationally addicted to trading stories because they have urgency and they’re entertaining, even if ultimately unsatisfying to the 90 million Americans who are trying to figure out what to do with their wealth. There is a relentless focus on analyst research calls, upgrades and downgrades, economic data releases, merger and acquisition buzz, hedge fund activity etc. This is all highly interesting and I personally enjoy both consuming and creating this type of content as well. But it should not be the only thing on the web / airwaves. It is disproportionately dominant when compared to its actual utility for the majority of the audience. There is a huge content arbitrage opportunity here.

5. This is very much a junk food versus eating your veggies conundrum and we know who usually wins these tug-o-wars in real life. It’s not that people don’t need to know the macro news or the state of the markets each day – it’s that this stuff is really only relevant to them as it affects their portfolios and, by extension, their lives. Financial content and journalists can and should do more to connect the two in their reporting.

6. Some media outlet, print or television or radio, is going to figure this out and exploit it. Many media companies do not make the distinction between investing and daytrading, but they should. Making the investing process fun and exciting is not hard to do with the right talent, writers and format. Focusing on process versus outcomes will also engage professionals to share this content and participate in its manufacture as well.

7. The advertisers – from luxury auto companies to ETF arms dealers – will beat a path to your door once you establish dominance in this market. Here’s what is at stake in dollar terms (also from Roame’s presentation):

SLIDE ASSETS

8. There are thousands of potential content creators from the asset management and wealth management verticals who are essentially untapped and more than eager to participate in this sort of thing.

9. The news of the day is only part of the key to appealing to this audience – portfolio analytics and measurement tools to help them track where they are in their retirement goals – along with risk management gauges – will give people a reason to check back in and engage if you can’t get them in via trading ideas or “breaking news”.

10. Most market commentary – by definition – is stale within hours of being produced or published. I have personally created over 8000 pieces of it and believe me, nobody will ever read 99% of what I’ve done prior to last week unless I’m accused of a triple homicide and claim to have buried clues to the crime within my old posts.  But content that deals with real investing as opposed to “trade the news” is a lot more evergreen. Given this reality, you would assume the media would find it more profitable to emphasize this kind of stuff…

I think the existence of this disconnect is fascinating, so many people’s mindsets are locked in this late-90’s paradigm of stockpicking as a hobby. And yet even a casual glance at the fund flows over the last few years would tell you that the Boomers have moved away from this kind of activity while the newer generations of investors (X, Y, Millennials) have never been interested in it.

Anyway, someone’s going to figure this out and do it right. Maybe.

Below, a quick and very incomplete list of financial media outlets, people and sites that emphasize investing:

Tadas Viskanta (Abnormal Returns)

Barron’s

Bob Seawright (Above the Market)

Jason Zweig (WSJ’s Intelligent Investor)

Morningstar

iShares ETF Blog

Tom Brakke (Research Puzzle)

Context (AllianceBernstein)

There are more out there, what are your favorite investing resources?

 

 

 

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: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.

What's been said:

Discussions found on the web
  1. erotic podcast commented on Sep 13

    erotic podcast

    […]Here is a great Weblog You might Find Interesting that we Encourage You[…]

  2. Stepfamily Porn Online commented on Sep 14

    Stepfamily Porn Online

    […]that would be the end of this report. Here you will obtain some internet sites that we consider you’ll enjoy, just click the hyperlinks over[…]

  3. Stepfamily Porn Online commented on Sep 14

    Stepfamily Porn Online

    […]although web sites we backlink to below are considerably not related to ours, we really feel they are actually worth a go through, so possess a look[…]

  4. xxnxx commented on Sep 16

    xxnxx

    […]we came across a cool website that you just may delight in. Take a appear should you want[…]

  5. Dolce and Gabbana commented on Sep 16

    Dolce and Gabbana

    […]the time to read or stop by the content or websites we’ve linked to below the[…]

  6. Givenchy commented on Sep 17

    Givenchy

    […]Wonderful story, reckoned we could combine several unrelated data, nevertheless actually really worth taking a search, whoa did one master about Mid East has got extra problerms too […]

  7. Jimmy Choo commented on Sep 17

    Jimmy Choo

    […]we came across a cool website that you just may well take pleasure in. Take a search in case you want[…]

  8. خرید vpn commented on Sep 19

    vpn ایفون

    I completely really like your site and find a great deal of your post’s to be exactly I’m hunting for. Does one particular offer guest writers to compose material accessible for you? I would not thoughts generating a put up or elaborating on a handful…

  9. Coupon website commented on Sep 20

    Coupon website

    […]Wonderful story, reckoned we could combine some unrelated information, nevertheless definitely worth taking a appear, whoa did a single find out about Mid East has got a lot more problerms at the same time […]

  10. خرید وی پی ان commented on Sep 21

    vpn ایفون

    Right now it seems to be like Movable Type is the top running a blog system out there proper now. (from what I have read) Is that what you are using on your website?

  11. خرید وی پی ان پر سرعت commented on Sep 22

    vpn ایفون

    Do you have a spam problem on this weblog I also am a blogger, and I was curious about your situation many of us have designed some great procedures and we are searching to trade strategies with other folks, why not shoot me an e-mail if fascinated.

  12. اکانت وی پی ان commented on Sep 23

    vpn ایفون

    normally posts some amazingly intriguing things like this. If youre new to this internet site

  13. Parfum Vergelijk commented on Sep 23

    Parfum Vergelijk

    […]just beneath, are various completely not connected web-sites to ours, on the other hand, they’re certainly worth going over[…]