Reading financial news these days has become more of a task for netizens. Gone are those days when you would sit for hours, read and gain knowledge. While the age of a pen and paper is coming to an end, the reading capability of people is also plunging like stocks in major stock markets. However, in the financial world, you got to read, analyze, and predict if you want to become a great investor.
What does it take to be a Great Investor?
One would say financial tools would double your money. Another would say having high performing companies in your portfolio would make you a share market tycoon. No matter how right these things are, you are missing out on the fundamental element of this all – knowing what is happening in the industry – which only financial news can tell you.
If you don’t know what is happening in the stock market and which government policies are going to affect the companies you have bought shares of, no financial tool or a broker will be able to save you from bankruptcy.
How does Reading Financial News Help?
No website on google tells you how reading financial news helps. Don’t trust us? Google it up. Reading financial news gives you an upper hand than your peers while picking stocks.
I’ve invested in companies such as Coca Cola, Walt Disney, Kraft Heinz, and a lot more. I remember when I jumped into investing game, I would go with my gut feeling and buy shares of companies. I experienced losses.
Later, I started reading financial news and analyzing market conditions. It helped me big time. Since then, I have not experienced major losses in the stock market.
Although reading financial news is the first step toward becoming a great investor, it’s not everything. There are several things you need to keep in mind while reading financial news.
Important Things to Keep in Mind While Reading Financial News
Read from Multiple Sources
The platform you are reading the news on may likely have half information. Reading from multiple sources will help you get a clearer picture of financial markets. Following different analysts’ forecasts will help you in the long run, this gives rise to the second most crucial point.
Don’t Trust a Single Analyst’s Predictions
Financial news platforms call industry personnel to speak on stocks. It is likely that the guest is somehow linked to the company; hence, he is talking good about it. Such guest speakers could be company executives or stakeholders in the company. Thus, it’s essential to follow more than one analyst’s predictions while reading financial news.
Read Numbers not Words
Financial news platforms are a perfect blend of words supported by numbers. If you are gaining information through the financial news, you must look at stats, graphs and stock indexes than stock recommendations made by analysts, because fluctuations in stocks and figures always show the true picture of the market.
Read Contrary Views
Every human has a perspective to look at things. When we read something against what we believe in, we often blame the author saying, “he is soo wrong!” You will not grow in the market if you consider only one facet of a thing. Every story has multiple folds – the same way, every surge or decline in shares has multiple reasons. Try to look beyond what you can see and question the narrative.
Read Old Reports
A plunge in shares of a company and a fall in the shares of another company are the only two factors happening at stock markets. The rising and falling of shares is not something out of the blue for investors. If you dig into old reports, you will find similarities between the present and earlier scenario of the market.
Changes in government policies, trade wars, technological advancements, and a lot more things affect shares. Such changes take place in intervals, and a market fluctuates accordingly. Reading old financial news tells you how to behave when something similar happens.
Read from Both Pessimists and Optimists
There are two kinds of financial news platforms on the internet – optimistic and pessimistic. Some platforms are perpetually confident about businesses and the economy. Others act like perambears, who despite the strong market always think the prices will fall. You must read both views and make an interpretation.
Cut the Clutter Out
Cutting the clutter out is like an art. There is too much jargon provided in news. Many financial news websites mislead their readers by writing favorable articles for companies for money. Read our previous article on how to find reliable financial news websites to avoid falling in the trap.
Reading financial news does not have to be stressful. To narrow it down for you, I would say, be aware of the recent developments, learn to analyze and interpret situations to earn the best returns.