With the advent of 24-hour rolling news and social media, the amount of information we’re exposed to these days is greater than ever before.

You might imagine that this unlimited access to the latest news is useful for managing your investments. If you want to read about a topic, simply type it into a search engine and you’ll be presented with a barrage of reports in a flash.

The sheer volume of data isn’t necessarily helpful though. Instead, it can be overwhelming and lead to “doomscrolling”, a term that describes time spent online consuming vast amounts of negative content.

The problem with doomscrolling is that exposure to negative news can lead to emotional, knee-jerk decision-making that harms your investments, rather than helping you manage them.

Read on to discover why, and how you can prevent doomscrolling from affecting your portfolio.

Doomscrolling negative headlines can detrimentally affect your investments

Doomscrolling can become an issue when the negativity of news stories affects how you manage your wealth. And there’s a lot of negativity out there.

Indeed, research published by PubMed shows that negative words in news headlines increase consumption rates compared to positive words. Negative headlines are designed to get our attention.

Think about some of the financial headlines you saw in 2023. Stories included:

• Surging inflation and the cost of living crisis
• Rising energy prices and the “heating or eating” dilemma
• Increased borrowing costs as the base rate rose
• The Office for Budget Responsibility’s (OBR) updated forecasts.

These stories undoubtedly paint a negative picture of the financial landscape last year. In response, you might consider making changes to your investments to protect your wealth.

To contend with the cost of living crisis, for example, you might have liquidated your investments so you had easy access to cash if you needed it. Or, when the OBR downgraded UK forecasts as the BBC reported, you might have restructured your portfolio for fear that businesses will struggle in 2024 and 2025.

However, the negative headlines that led you to these choices might not be representative of what’s actually happening or how it affects you. Ultimately, this could lead you off track and hamper progress towards your goals.

Ignoring the noise and concentrating on the long term might be the most sensible course of action

A key reason for ignoring the noise of negative headlines when managing your investments is that it’s often more prudent to concentrate on the long term.

Consider these figures from Schroders, analysing 148 years of stock market investing on the S&P 500, an index of the 500 largest companies in the US by market capitalisation.

According to this data, you would have lost money in inflation-adjusted terms around 40% of the time if you invested for just a month. These odds, though, decreased over time, falling to:

• 30% over 12 months
• 20% over five years
• 10% over 10 years
• Almost 0% over 20 years.

While this data doesn’t necessarily indicate what will happen in the future, it does show that your odds of generating a positive return are greater the longer you invest.

Making emotional or knee-jerk changes to your investments in response to negative headlines could harm your portfolio. You might inadvertently realise a paper loss, simply because of something you read online.

Had you remained invested and stuck to your plan, you might have ultimately been better off.

There are plenty of ways you can reduce the impact of doomscrolling

With all this in mind, it’s important to prevent negative headlines and doomscrolling from dictating your decision-making. Fortunately, there are plenty of strategies you can use to help you avoid it affecting your investments.

First and foremost, it’s worth thinking about cutting out the sources of your doomscrolling. For example, if there are particular news or social media sites that you know you spend time scrolling through, consider deleting the apps from your phone so you won’t be tempted to use them.

You might consider leaving your phone in another room in the evenings. It can be especially tempting to doomscroll before bed, so this option offers another barrier that stops you from doing so late at night.

Of course, if you really can’t help reading the headlines, another option to consider is to check your investments less often and focus on the long term. Remind yourself that you have a long-term plan and find reassurance in it.

Perhaps most valuable of all, you might consider speaking to us.

Get in touch

If you’d like support with managing your money in 2024 or reassurance that your long-term plans are on track, we can help.

With decades of experience, our Chartered Financial Planners have the expertise to help you stay on track to your investment goals, whatever happens in the wider world. If you have any questions, please get in touch and speak to us today.

Please note

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor.