There is a proliferation of news available at your fingertips these days. You could be overwhelmed by the staggering volume of information on various media platforms. Even if the news and analysis data drop by 90 percent, there is still a surfeit of information. There is so much media content from thousands of writers you may be in a quandary of how to make use of it all. As a beginner wanting to know about developments in the financial world, it may be an embarrassing and time-consuming experience sifting through stock-related information. It is almost a painstaking labor of love.
When you enter the financial market for the first time, it is essential to understand the various market-related strategies and techniques better. As a first step, you can read the most updated financial news from reputed websites and publications.
Here are a few essential points to consider and guidelines to follow as a beginner on how to come to terms with various financial data.
Agree to Disagree
The diversity of opinion makes us vulnerable to something called confirmation bias. It happens when you look for information to back up your statement. It’s dangerous; you become more convinced you are right when you find someone who agrees with you. It is better to use the intellectual approach of Charles Darwin, who regularly tried to disprove his theories. It is better to agree to disagree when you start with financial news. You could probably learn more from people you oppose. Then your existing beliefs, which can be by emotion than fact, are challenged literally.
Old News
Why do readers go to a library? It is not just to read the latest books or periodicals. It is often to read about history and references to events that happened in the past. There is a saying that old is gold. It could apply to reading old newspapers too. It can give far greater insight than reading current news in this fast-changing world of information.
Old news never loses its value. It provides hindsight and perspective to forecasts made weeks or months earlier in prediction-type articles, which make up a big chunk of financial news. It is then you realize how inaccurate they were.
There was a report in March 2020 headlined ‘Dow would drop nearly 3,000 points, as coronavirus collapse continues; worst day since ‘87’. It happened as predicted, but what seemed monumental became irrelevant because The Dow Jones regained all of its losses.
When you read old news, the first thing you realize is that most predictions never come close to being true. We may think important information could be trivial in the long run.
Professional Content
It is better to read content from professional journalists than amateur bloggers. They will always be more factually accurate because they have better access to reputable sources and analyze deeper into a subject.
Banks and financial institutions also have their reports and analyses. There are dailies, weeklies, monthlies, quarterlies, half-yearlies, etc. There is a handful of reputable financial newspapers like the Wall Street Journal and Financial Times, and the likes of CNBC and Bloomberg are just the tip of the iceberg. There are many sources you can read news, from the morning news at your local gym to notifications in your mobile phone apps.
At the same time, it is essential to discern what is best from the cloud of information you are getting. Professional journalists may be susceptible to turning non-news into newsworthy because they also have deadlines, quotas, and bosses with quarterly earnings.
Amateur bloggers don’t publish anything, sometimes for days on end. They cater to readers who demand quality.
Don’t React to Every New Story
There are thousands of news articles published every day, but you have to decide what compels you to take action. News about quarterly earnings should not cause you to buy or sell. It is the same with industry trade news, analyst upgrades, and downgrades. You can treat most financial news as something that helps you understand the big picture. If you find yourself tempted to tweak your portfolio after reading the news, read less of it.
Curate Content
You must be able to determine what is important to you. What are the markets you should focus on to understand the developments? Get familiar with who is writing were and their expertise. Filtering your content is also a great way to start. Reading about what interests you will be easier to digest and motivate you. For instance, some people like to read articles on technology and gadget makers. Others focus on politics and sports. Once you have identified the countries, industries, or companies, you can curate your content to suit your needs. Follows their news updates that are related. Patience is also a key to understanding the context of the content without making knee-jerk reactions to events.
Expert Opinion
Remember, you are not an expert. Then you should seek the advice of experienced people in the industry. Don’t restrict yourself to reading or watching the news all the time. They mostly give information as it breaks. They rarely provide in-depth analysis. A rookie in the field may find it difficult to interpret it. Get into the habit of reading a good mix of expert opinions and how they draw it. Also, check their credential and courses to cut dissect the wheat from the chaff literally.
Shortcuts
In any field of activity, there are no shortcuts to climb the ladder of success. For that, you have to be disciplined and be ready for the grind. You need commitment if you want to be good at something. It may take months before you get the hang of it, especially financial news, which is complex. It is like learning a new language.
