3 Best Practices to Follow While Going Through Financial News

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Those in the financial market often start their day with today’s financial news to stay updated on what’s going across the globe. With countries now economically dependent on each other, the ripples of any disaster or decision happening in any part of the globe affect everyone. The problem, however, is that there is an abundance of financial news and to sort and decide which one to follow is really is a mammoth task.

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The portfolio managers who need to go through today’s financial news religiously, at times feel that going through the whole bunch of it is actually a sheer waste of time as most of the articles that get published are based on backwards looking. What they need is something from which they can predict the future happening.
Thus, in order to filter and read the relevant news item, ask the following three questions.

• Is the article based on data or opinion? This is extremely important as views are personal and varied, whereas data speaks for itself. If the conclusion is based on facts and figures, it is worth going through. It is further to see how genuine the data is.

• Is it just the description of past events or can some concrete prediction be made for future? Most of the times, all articles keep repeating what happened in the past and then try to link the past result with the economic conditions prevalent then. We should learn from the past, but no scenario repeats itself in totality. So, just analysing the past events is not going to be helpful. It will only suffice one purpose- to impress people around you as it will make you look informed and updated.

• Is it possible to test the hypothesis that the writer of that particular article says? Most of the professional writers have deadlines to follow and thus at times they frame things that can be confusing without any concrete research. Their hypothesis can be incomplete, misleading and sometimes it can be totally wrong. It might be possible that they have some political agenda and hence they can cook something that is going to hurt or benefit a particular political brigade. So, check if that hypothesis they are building their views on has a solid foundation and can be trusted.

Pseudo-news is a big nuisance today and one has to be really cautious of it.




 

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