Banks and financial institutions all have their reports and analyses. You’ve got dailies, weeklies, monthlies, quarterlies, half-yearlies, and so on. You have a good handful of the reputable financial newspapers like the Wall Street Journal and Financial Times, and the likes of CNBC and Bloomberg being just the tip of the iceberg. You’ve got all sorts of mediums from the morning news being screened at your local gym, to your mobile phone apps and notifications.
As a newbie, the amount of sources itself can be overwhelming, and where do we begin? Let me share with you an episode of mine. I ambitiously subscribed to the Wall Street Journal, and felt super proud about my commitment to read it… until one week in. I was quite excited to start on something new and novel, but I must admit I was so lost. Every article sounded important, so I didn’t know what to focus on. There were so many terms I didn’t understand, and companies that I didn’t recognise. The more I went on, the more clouded I seemed to feel, and it slowly built up to confusion. I sought advice from my much financially-savvier colleagues, and here’s a summary of what they shared with me.
Curate Your Content
Determine what is important to you. Geography is a great way to start. Most financial news have a focus on certain markets like the US, so get familiar with who is writing about where, and their expertise. Filtering what you want to read by industry is another great way. By aligning your personal interests, the news you read will seem easier to digest. For example, I find myself more motivated to read articles on technology and gadget makers, compared to those that focus on energy and politics. Once you’ve identified the countries, industries or companies that you are interested in, it’s time to do your homework. Follow news that is related to them, and over time, you will get more familiar with it. Be patient and careful, and strive to understand the context of reported news, without being too reactionary to sudden events.
As you begin to venture into the world of investing, you will find that it is highly encouraged to diversify as well. Investment opportunities are limitless these days. And very likely, the companies or their products you want to invest in, might already be part of your life. Taking a page out of Warren Buffett’s book, he likes to invest in what he consumes. Here is a useful read on what we think on it.
There are No Shortcuts
Our boss Qiuyan was thrown into the deep end when she first started her banking career, but it was also how she learned the fastest. She was forced to do market summaries to her seniors who would grill her on her interpretation and analysis on what was happening in the economy every single day. It wasn’t till almost six months in before she got the hang of it. We have to be disciplined and commit to a grind if we want to get good at something. Of course not all of us want to be at her private banking level, but the discipline is important. Just like learning a new language, proficiency will come with time, effort and practise.
Seek Expert Opinion
Are you an expert? No? Then we should seek the advice of those who are. Don’t limit yourself to news all the time. Understand that they mostly report what is happening, but seldom share in-depth analysis and what it means. This may not be helpful to the novice investor as they’re not sure how to interpret it. Have a good mix of expert opinions in your reading diet to try and understand how they draw their opinions. Like we mentioned earlier, everyone has a different approach to things, but it would definitely benefit us if we could draw similarities in how the experts form their opinions. Check their credentials and see if reputable sources quote them, because it’s important to cut through the fluff of marketing gimmicks and self-praise.
We are all human, and our psychological makeup causes us to have something called confirmation bias. After we’ve formed an investment view or opinion, we like to crawl for information to justify ourselves, and that can be dangerous. In the internet-age we live in, we can find someone who agrees with our view, no matter how wrong, if we look for it long enough. Check in with trusted friends who are financially savvy, or get connected to a qualified financial advisor who has loads of experience and excellent sources of information that you can bounce off with. (Need help getting connected to an advisor? Click here )
We’ve only just begun getting our feet wet and there’s so much to talk about, but we shall delve deeper another day. We should understand that financial news should always be treated as information, and not actionable advice. The more we read and learn, the more it incrementally sheds clarity on the bigger picture of things.
There is a proverb that says the beginning of wisdom is to get wisdom. I hope this has been helpful and inspires you to start planning your reading diet in your financial literacy journey.