Weekend reading

Good reads from around the Web.

One of the things I’m least proud of – aside from my D grade in French and my habit of laughing aloud at my own “hilarious” jokes – is my fascination with the financial media.

I read the news websites and blogs avidly, and watch a fair chunk of CNBC and Bloomberg, too.

If you’re an active investor (for your sins) then I’d argue the former can be a good source of ideas, although only as a starting point for doing your own research.

But I can’t remember ever making money from an idea I got off the TV.

I’ve consoled myself that I watch CNBC and Bloomberg like other people watch football, or that I use the endless procession of talking pundits as a contrary-indicator.

(Seriously: I think they put Nouriel Roubini (a.k.a. “Doctor Doom”) in a cupboard under the stairs between market wobbles).

When rising markets bring you down

It seems though that even this light telly watching could be dangerous, according to researchers from Kansas State University’s Financial Planning Research Center.

As reported by Advisor One, these academics found:

… stress go up when watching financial news, and hearing that the market went up causes stress levels to rise even higher.

“Specifically, 67% of people watching four minutes of CNBC, Bloomberg, Fox Business News and CNN showed increased stress, while 75% of those who watched a positive-only news video exhibited an increase in stress,” they wrote.

Yes, you read that right – stress levels actually rose with the market for most people. So making sure you switch off during a meltdown might not be enough to protect you from rising anxiety, and all the poor investing decisions that could come with it.

The researchers believe that this rising stress is caused by the fear you’re missing out on even better gains.

Hmm. I’ve had a great year from my investments, and I’m reluctant to tamper with a winning formula. Who knows? Perhaps the bouts of Bloomberg watching is contributing in some unseen way to my returns?

However if it’s also contributing to me having a heart attack at 50, I might have to think again!

Be a passive investor for wealth and health it seems.

From the blogs

Making good use of the things that we find…

Passive investing

Active investing

Other articles

Product of the week: I can’t find any interesting financial products to flag up this week. And I’m not alone, according to This Is Money, which says all the best rates have been slashed.

Mainstream media money

Highlights from the wall of noise…

Passive investing

  • Lyxor cuts fees as ETF price war hits Europe – FT
  • More US pension funds are using ETFs for bonds – P&I

Active investing

  • Why are companies hoarding so much cash? – The Economist
  • More evidence illiquid assets and big funds don’t mix – Bloomberg
  • Investing in closed-end funds in wind-up mode – FT

Other stuff worth reading

  • Lessons from the investors of 300 years ago – Wall Street Journal
  • FSA forces pension funds to give lower projected returns – FT
  • HMRC paying divorcees cash for tax cheat tip-offs – FT
  • Trillions of dollars of share certificates ruined by Sandy – FT
  • Minister: Middle-class child benefit losers are NIMBYs – BBC
  • Eat well on a budget – Telegraph
  • How micro-loans are helping the world’s poor – The Guardian

Book of the week: Investec fund manger Alastair Mundy seems to be highly-rated, but who knows how long his run will last? He’s also a very funny writer, though, as proven by his new book You Say Tomayto. It’s a collection of monthly notes to his investors. Buy it and you can enjoy his wit without paying to take a chance on his stock picks.

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Further reading:

  1. Weekend reading: The bull market is one-year old, but the bear market is ten
  2. Weekend reading: Financial (ill) advisers shun ETFs
  3. Weekend reading: 60 years of rising house prices, saving rates, and soaraway shares

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