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“Click-Bait” and the Financial Media

Recently we wrote about misleading charts circulating in online articles. Unfortunately, sensationalistic articles and even more so, sensationalistic headlines are mushrooming in online popularity.

A term has even been coined for creating an eye-catching headline meant to lure readers to an article — “click-bait.” The financial news world is not spared from this trend, with plenty of misleading, fear inducing headlines intended to make our hearts jump (and drum up advertising revenue for those that write them).

Many of the sites that promote these articles make no apologetics for their tactics. Indeed, one site, upworthy.com (which specializes in headlines such as “The Recovery Is Over! Stock Market Is Up! Life Is Great! Wait, What?”) explained that they write and test at least 25 headlines per article and highlighted how they will even make up words to catch viewers’ eyes.

The results? Headline driven sites such as upworthy and buzzfeed.com find that their content is shared many more times than articles from traditional news outlets like The New York Times, CNN and The Wall Street Journal.

Here are some tips to navigate between quality financial articles online and articles of questionable value:

  • Do not assume an article proclaiming new insights details anything noteworthy. Some articles are recycled many times over, packing in old facts or events and scaring readers. One article proclaiming doom for the stock market cited facts from 2012. Though the article carried a 2014 date, it originally appeared in…2012. The content was hardlyconvincing in 2012, but is downright misleading in 2014.
  • Check coverage from multiple sources, including an internationally recognized and established news site. Large newscompanies rely on the accuracy of their reporting for traffic. However, academic research has shown that articles that frame an event in an anger-inducing way are more likely to be shared than more moderate takes on the same event. One article may cast a very negative spin on a news development, but you may find that other articles put the issue into a broader, less sensationalistic context.
  • Talk to your advisor and discuss what concerns you — with so much material available, it is very worthwhile getting help discerning what is important from what is just marketing gymnastics.
DISCLAIMER: Past performance does not predict future results. This report is based on data obtained from sources we believe to be reliable. Hefren-Tillotson does not, nor any other party, guarantee the accuracy or completeness of this report or make any warranties regarding results obtained from its usage. All opinions and estimates included in this report constitute the firms judgment as of the date of this report and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation to buy or sell the securities herein mentioned.

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