Sunday, May 29, 2011

Is Personal Finance stale?

This is a rant; as a blogger for over three years now, I think I have a right to rant occasionally. There is not shortage of myths; this much I can tell you for sure. As a journalist covering personal finance, especially mutual funds, for the past 10 years, I should know. Ofcourse, new developments do not take place in the PF space everyday, especially in any one given beat, say, MFs that I cover. Often, people- especially fellow journalists (and this is where it kills me that the myth exists in ur own community rather than outside)- misunderstand or rather blatantly assume that things get repeated in the PF space. The same-old tale of asset allocation, invest in equities for long run, why you should invest in MFs and so on are repeated like 10 times in a year, they feel. Hence, a PF journalist leads a cushy life at work; if you don't have an idea, just pick an old story and recyle and voila, there's a 'new' story, they say.

Without going into a length tirade, here's what I think:

  • Competition in the media space is as severe as it can get. On top of it, every publication worth its salt wants to get into PF, committing resources to hire talent and infrastructure and obviously need PF writers to perform to their best to stay ahead of the competition. If that is the aim, recycling is a bad idea. Any responsible editor would see through a recycled story and stop it from going to press.
  • Because of changing market scenario and dynamics, there isn't really a shortage of story ideas. There isn't a dearth of topics because the entire world is changing. Changing regulations, new and more complex products are the new order. A good PF writer is paid to spot these trends and there's enough to write
  • Last, but not the least, financial illiteracy is a huge nuisance. Just because I wrote seven years back advising retail investors to invest in equity funds for the long run, that doesn't mean every tom, dick and harry have since started to do the same. You've got to drill first principles into the reader's mind, even then you will find it won't be enough. By that time, several other things may have happened. This merits passing on the same message if you will, but with a new twist like new data, fresh arguments and so on. And if fellow journalists are so financially illiterate (so many do not even bother to track their provident fund, for instance) how can I expect my readers to head my advice? 

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