The Media's Role in Financial Education

Investors get most of their financial and business education from the media, especially brief bytes and headlines.

                       

Schools don’t provide an adequate underpinning of information for students to be able to comprehend economics and finance in the real world. As a result, the public cannot evaluate the bombardment of ads, nor headlines that apply to finance and business topics. They get few meaningful explanations from inept media sources.

                       

They therefore get biased, one-sided opinions without any contrasting arguments or alternatives from headlines or inadequate financial and business articles.

                       

Brokers and advisers cited in the media frequently promote a particular point of view. The media often poorly screens content.

                       

Remember also, the importance of investor age, family status, personal psychology, finances and risk status, have lots to do with investment choice, Media slants often neglect them.

                       

So stay alert to basics and avoid tips from questionable media sources. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole tweets.)

shole tweets.)

Ad-Promoted Investment Advice

                 

Ads give only the advantages, and not the downsides of investments being suggested. Why take the advice? Yet, so many investors learn about what they buy solely from ads and other salesmen.

                       

I have researched over 1,600 investment strategies that are occasionally or frequently used. I have also looked into the pros and cons of each.

And I have not found any one that has an exclusive advantage without at least one disadvantage.

                       

An example: Sellers of gold investments may be selling one type without discussing various other forms, or whether everyone ought to be buying gold, despite looming inflation. The public never gets full information.

                       

Furthermore, investor age, family status, personal psychology, finances and risk, have lots to do with investment choice. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Government Deficits Spell Disaster

                 

Some American voters appear to think differently but you can be certain that government deficits will spell disaster. For taxpayers and even for those who don’t pay taxes, nor anyone who worries about the cost of living.

                       

Government spending can easily be borrowed away. That debt of today, however, is being financed at very low interest cost. Those costs will easily double and triple. Long term rates can conceivably reach 18% or so from under 3% right now, Thus we are looking at astronomical debt, with poor prospects of an economy expanding where it can accommodate that debt.

                       

The public will eventually see that today’s spending is only a down payment on future costs, to be paid by heavy taxes and a more worthless dollar. Yes, if taxes don’t foot the bill, a worthless, inflated dollar will.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole tweets.)

                   

               

Huge Adviser Fees of Big Investors

                   

Even pros are feeling those adviser fees. Huge institutional investors should be able to get better terms as investors. Mutual funds do reduce expenses to clients who keep larger fund balances. This is perfectly logical and it’s legal.

                       

But the U.S.government has not been happy about fee discounts if done in unison by organized major investors. They include; endowments, foundations and pension funds, as part of groups, Institutional Limited Partners Association (ILPA).

                       

They would all like to negotiate lower terms than they have been getting. But it would be against the “anti-trust” law. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole tweets.)

The U.S.Treasury Gold

             

There’s been talk about how Treasury Department gold can be used, or whether it ought to be kept as it is.

                       

One suggestion has been to use it to reduce U.S. debt. I would rather not sell gold for this purpose, as I feel it will not reduce or affect government spending habits,

                       

I believe the gold holding ought to instead be used to back the U.S. dollar. The stability would be an economic boon. That should also accompany reduction of government spending and debt.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole tweets.)

The Extraordinary Financial Adviser Cost

               

As you know from my reports, I find professional advisers extraordinarily expensive for most ordinary investors. They take as much as 20% and more of earnings when their cut is 11⁄2% or more of assets managed.

Only investors who require estate and tax advice need additional expert consultation.

                       

To make themselves appear necessary, advisers will make up portfolios with as much as ten and more individual funds when just a few, low cost funds will do. The assortment is supposed to be the result of more selective investment thought. But the end result is meaningless, apart from marketing the adviser’s service.

                       

Once you learn investment basics, you can manage your own investments with low- cost index mutual funds, (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole tweets.)

                   

               

       

Heavy U.S Debt Results

Most Americans may not be too concerned about heavy government financing by enormous borrowing, the equivalent of printing money, and the enormous outstanding debt that has to be constantly financed.

                       

Funds for financing business and government are in a Zero Sum game. Funds needed by government to finance huge debt have to displace funds needed by industry. Economists of every stripe concede that. This problem will get worse when government has to raise its cost of borrowing from currently very low, to more realistic, higher levels.

                       

Governments can only overcome the accommodation for extraordinary spending and the potential problems they will entail, by expanding the economy. But if the government is heavily taxing while borrowing and literally printing money, it will be curtailing that necessary economic expansion.

                       

You cannot borrow forever without hurting

expansion because you crowd out funds required for private business to operate normally. There will be business stagnation and inflation. Proof has been shown over and over for centuries. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole tweets.)