Headline Hyperbole

If you pay much attention to the news, you likely notice a fondness for sensationalist language.  The stock market doesn’t just rise or fall anymore, but instead “soars” or “plunges”.  Inflation doesn’t just increase, it “skyrockets”.  Relatively innocuous developments somehow become “unprecedented”.  Difficult situations become “disastrous” or” devastating”, and so many things seem to be “shocking”.  Media too readily reaches for superlative words and phrases to communicate somewhat normal occurrences.  Read on to learn more through the perspective of a certified financial planner.

Why All the Excitement?

Because it attracts us…it gets us to watch or click or read.  Hyperbolic language is tempting and satisfying in the short-term, yet often at the expense of accuracy and honesty.  The right word all too often defers to the noisiest word. 

This amplifying language also invokes stronger emotions.  “Dow Declines 600 Points On Higher-Than-Expected Inflation”, or “Dow Plunges 600 Points On Skyrocketing Inflation!”.  Which of these headlines conveys information more honestly?  Which of these causes us to feel more emotion?  

Financial media is especially problematic in this regard because money can also heighten emotions.  Investors can be easily rattled by news stories about financial events and their potential impact on markets.  While there may not be misinformation in reporting, there is often sensationalism around the ramifications of events or news. 

This sensationalist language tends to activate the part of the brain involved in emotional responses, versus the brain system responsible for more rational thought processes such as reflection and deliberation.  Nobel prize-winning psychologist and economist Daniel Kahneman identifies two main ways our minds process the world:  

  • System 1 thinking, characterized by snap assessments and thoughts processed in the amygdala.  The amygdala is also responsible for emotional processing.
  • System 2 “slow thinking”, characterized by deep analysis.  

Modern media, particularly headlines, seem disproportionately focused on the reactive and emotional tendencies of our System 1 brains.        

Unfortunately, we know that emotional responses can often lead to poor investment decisions.  Powerful emotions can easily lead to reactive and self-defeating behaviors. Feelings of fear or greed are particularly dangerous in the context of investing.  Media that intentionally moves investors closer to these strong emotions can lead to problematic decisions that can cause lasting financial harm.  

At Morris Financial Concepts, Inc., our financial advisors focus on clear, calm, and honest communication.  This is part of our role as fiduciaries.  Whether in times of celebration or through difficult conversations, communication without hyperbole is important in managing emotions and ensuring thoughtful decision-making, and we offer you a certified financial planner that helps cut through the noise.  We provide guidance that maintains the focus on those things that really matter on each client’s unique path toward success.