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Aug 9Doug Smith

Buzzword of the Week: Financial Porn

Aug 9Doug Smith

Generally, I try to keep this blog G-Rated. However, I had difficultly passing up this particularly lurid buzzword, found in the Investopedia dictionary.

Financial Porn is a slang term used to describe sensationalist reports of financial news and products causing irrational buying that can be detrimental to investors’ financial health. Short-term focus by the media on a financial topic can create excitement that does little to help investors make smart, long-term financial decisions, and in many cases clouds investors’ decision-making ability. The term was first coined by Emmy-winning Jane Bryant Quinn, who is an American personal-finance writer.

Expanded media coverage, specifically the advent of 24-hour cable news networks and the internet and the tools it has provided the financial industry, has led to a large increase in financial porn.

Examples of financial porn include constant advertisements of easy-to-use trading-strategy products that purport to turn minimal investments into small fortunes, media coverage of the latest and greatest sector trends and magazines with front pages that claim to have the next 10-must-own mutual funds of next year. Many of these products and ideas expose investors to great risks posed by both the movement of the market and the risk of fraud.

 

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