“You get recessions, you have stock market declines. If you don’t understand that’s going to happen, then you’re not ready, you won’t do well in the markets.” – Peter Lynch, an American Investor
How do you know what kind of financial news you should read?
Is it the right financial news for you? What if you are a beginner? What should you do? The financial news can be very overwhelming especially when you are a beginner. There are so many different sources you can find in the internet and so many things that you can look at. Obviously, it is very difficult to know where to start and identify what is important.
How does the reader make use of it all? A lot of readers read and research until they are completely fed up. People who read with comprehension find it easier to conceptualize than those who just read something for compliance. It is always better to be informed and knowledgeable at things that interest you.
As a reader, you must learn how to uncover what is nonsense and move on. Investment blogs had taken in the golden rule of tabloid journalism which is making it worse. Some are simplified, then exaggerated. Obviously, it is important to identify what kind of financial news you should read because some sources can be confusing, making it hard to stay well informed.
Fake news in the Philippines are now uncontrollable, verification of facts has already vanished, and spreading of false rumors are rampant. Some people even fall for it. In March 2020, the National Union of Journalists of the Philippines and the Center for Media Freedom and Responsibility launched an anti-fake news campaign to warn internet users to refrain from spreading false information. This campaign will help fight the spread of misleading and false information. Unfortunately, you are basically all by yourself when attempting to absorb the financial news comprehensively. With today’s technology, you can easily find articles on the internet exchanging views on how to identify political bias, while the professional investment literature expresses how to separate financial statements.
As a financial writer who spends his lifetime exploring the news, here are some factors that we have considered when reading financial news.
You should be open-minded enough to read things you know you are going to disagree with.
A lot of news is being published every day and you can always find someone who agrees with you. There are articles for every field. People will agree and disagree with you and that makes the reader sensitive to something that we call confirmation bias. It’s when you have come up with a conclusion and then dig for more information that will support your conclusion. It is harmful to the reader because once you discover someone that approves of you; you become more convinced that you are right. On the other hand, you will most likely learn from the people you disagree with. They cause you to challenge your opinion about it. Whenever you feel convinced of a trend of theory, continue to disagree with it. Through this, you will be able to boost a standpoint that you had never thought of before.
You should read old news as well.
A lot of readers think that old news loses its value. Do you think reading old news is a waste of time? I strongly disagree. I believe that reading old news supports more information than current news. There are prediction-type articles that consist of a big part of financial news. It usually takes months or years after they were published, when you notice how misleading they were. Read enough old news, and you will come up with a conclusion that past performances of the market does not necessarily predict the future.
Read articles from professional and amateur writers.
Of course, professional journalists will always be definitely exact, have better sources, and can explore deeper than most amateur bloggers. On the other hand, amateur writers write to show favor of what they have to say to the readers. What can you get from reading both? It is really important to get your bias completely out of it and know both sides of the financial news because it is more helpful to approach things in a neutral approach and discover what they actually are before you figure out your final verdict. Readers should read both to keep unbiased.
Try not to think every news article is actionable.
This is the most important part. A lot of news articles are published every day and some of it will surely catch your attention. Most financial news should always be handled as something that progressively guides you to understand the real idea.
Know what is good to read.
Our opinions vary, but if you still find it hard to read financial news effectively, you can always try to reach out and consult your favorite financial writers and consultants through this website link.
Disclaimer: Just a reminder, dear reader, that the content in this column is my opinion only and should not be construed as investment advice because I am not your financial adviser, neither did I take into consideration your personal objectives, financial situation, needs or circumstances as your fiduciary. This column is mainly for your entertainment and education only.
Martorana, Robert J. “How to Read Financial News: Tips from Portfolio Managers.” CFA Institute Enterprising Investor, 5 July 2020, blogs.cfainstitute.org/investor/2016/08/09/how-to-read-financial-news-tips-from-portfolio-managers/.
Martorana, Robert J. “How to Read Financial News Redux: The Complete Series.” CFA Institute Enterprising Investor, 4 May 2020,
blogs.cfainstitute.org/investor/2019/10/31/how-to-read-financial-news-redux-the-complete-series/
Hamm, Trent. “The Basics of Understanding the Financial News.” The Simple Dollar, 29 Oct. 2019, www.thesimpledollar.com/investing/blog/the-basics-of-understanding-the-financial-news/.
Discussion about this post