The Rest of the Story
By Brad Thomason CPA
3/22/2015
Do you remember Paul Harvey? I used to love listening to him on the radio. It is probably fair to say that his unique way of talking was something of a gimmick, but that didn’t change the fact that he was a solid journalist and a pretty smart guy, too. His News and Comment was an enjoyable way to stay caught up on current affairs; and in an age before the Huffington Post and all things online, The Rest of the Story gave a window into things you’d never even think to wonder about in the first place.
Paul Harvey rightly realized that there was often a lot more to a news story than just the portion that could be captured in a standard newscast. The time constraints, plus the sheer volume of current developments, meant (and still means) that only the bare bones get covered before it’s necessary to move on to the next thing; no matter how important the story was. In many cases the part of the story that went untold was equally or more important than the part which did get told.
When it comes to news about investments, that very much remains true today. Investment news is essentially synonymous with what happened on the stock exchanges. Dow quotes are as much a part of the standard daily news formula as traffic and weather are. We are constantly being reminded about Wall Street and its goings-on. Which is fine: it’s an easy statistic for news outlets to get and quote, and a lot of people have a stake in what happens with stock prices. Having a general sense of what they are doing is useful information. It’s just not the whole story.
So what, you ask? Well, a couple of things.
First, this type of news coverage keeps stock results top-of-mind in a way that’s not always helpful (or healthy). Ask someone how they are doing on a day when there’s a big drop in prices, and they’ll often snap that they are awful: haven’t you seen what’s going on in the market today?!?!? Of course one-day moves in the market almost never matter that much in the grand scheme of things, but that doesn’t change the degree of emotional high tide/low tide they can engender.
Perhaps more important is the fact that having the investment news slot filled up with stock information means that it isn’t filled up with information about other kinds of investments. Remember, even for important things, there’s not much time to allocate to each story in a newscast. So once they tell you what the 3 major indices are doing, maybe throw in a quote on Treasury yields, it’s pretty much time to move on to the next topic.
I don’t blame the news industry for this, by the way. They have a lot to cover and a limited time to do it in, so broadcast news is simply not the right format for in-depth reporting. Investments of all types can be complicated things to talk about, and some of the less common ones wouldn’t have as much value to the broadcast’s entire audience. Talking about the results of exchange activity makes the most sense: it’s easy to get, quick to mention, and broadly useful.
But that means we have to dig a little to get information about the other investments which are out there. We have to find a different format than broadcast news. We have to remember to do it in the first place.
The simple fact that we are not being reminded on a daily basis about alternative assets in the same way that we are reminded about stocks can end up impacting investors in a substantive way. When making investment choices, if investors don’t take the time to learn the unreported parts of the story for themselves, they may pick from a much smaller pool of choices than the one which is actually available.
We can’t get Paul Harvey’s version of the rest of the story anymore. But investors making allocation decisions will benefit from having a wider range of choices if they remember to look into the corners of the investment world that the news media has less time to talk about.