Most private investors will seek information from what appear to reputable and well-informed sources. In the UK, the calibre of personal finance journalism is generally high and there are many sources of intelligent comment. Although this content is financially underpinned by advertising revenue (derived mainly from financial product providers) the journalists have a fierce sense of independence that will usually minimise any bias.
A greater risk arises in the wider press and social media. Investment news only makes it to the front pages, or TV news, either when markets are crashing or hitting record highs. These are exactly the times when most investors need to sit firmly on their hands and not join the herd. The media are in the business of entertainment, not providing investment advice. They will try to find the most charismatic exponents of extreme views, not necessarily those with the best qualifications. In any case, there’s no evidence that anyone can consistently predict market movements over the short term, so any predictions should be taken with a pinch of salt.
A common result of these episodes will be an urge to sell your investments before they drop any further. Unless you expect to need that money for other purposes soon, this will usually lead to missing out when the market bounces.
EQ tip: if you want to sell on the way down, be prepared to buy back in when the outlook is even worse than when you sold.