When you think about the vast quantities of money made by the individuals working on Wall Street and in the City of London you would naturally come to the conclusion that these people must know all there is to understand about financial markets.
Although the real truth is most don't actually back their very own views on the markets as they don't actually know what the marketplace is going to do. For the money they earn is from the fees they charge out to their customers, management and commission fees generally.
To clarify, I'm not saying individuals operating in finance do not know anything. They are indeed very smart and very clever and earn a lot of respect. But their cash comes from facilitating the mechanics of the system ie. client relationships, doing transactions, and doing sales etc. Not from predicting what is going to go up or down in the marketplace.
Stockbrokers are full of confidence and may bounce a great deal of facts and figures when communicating to future prospects. On the flip side, more details does not always lead to a greater level of market predictability. The information a prospect needs to learn is does that broker generating an income from picking stocks? The answer generally is no. The broker is comfortably getting income from the client fees paid to selling and buying on their own behalf. A market view is easy to attain when it's with somebody else's money. More to the point it may be easier to gamble when it isn't your own pocket fueling that risk.
The specialists within the media give the impression that the markets are easier to foretell than they really are. Watching a reporter on the tv or reading a columnist in the newspaper says that the price is going this way, the commodity is doing this, that as well as the other etc... everything comes across as being easy.
The media put out this sort of message that everything may be forecasted. A message which is persistent and that is easy to be seduced by. No one could really blame you for feeding off this over simplified view and come away thinking 'I could have a go at that, her explanation I could actually make some cash out of that.' The enticing read in the newspaper or report on the tv could make the majority of people fall into a false sense of that the markets are easy to keep one step ahead of.
The media has a job to do... and which is the job of reporting the financial arena so it is not as easy as just placing a hand of blame on their shoulders. But it is what it really is, as in the majority of media... a kind of form of gossip, and unfortunately the job of financial guesswork is in the realms of 'entertainment,' the reader has to find the topic interesting and entertaining to some degree, it must be a little pumped up as well as have the specific gloss to come across in a palatable way for all those watching or reading the story else their attention would just drop off. The financial markets are a difficult beast however the media underplays those difficulties.
Anybody thinking of trading or investing will have their view largely shaped by media reporting. It's important when listening to the specialists that you learn to be critical of what you read and hear.
So if the experts and media are unreliable, how do you learn about markets? The most effective answer is to try and begin to understand what has happened within the past. Like many things homework is everything. Spend some decent time looking into how prices have behaved within the past. I'm not discussing extensive number crunching or numerous time in the library, just researching how prices have reacted to big influences in a few market cycles. To get a comprehension of the dollar-euro rate as an example it is pointless trying to form a valid view without knowing where it has been and why. The euro value has fluctuated over the last few years and you'll find reason behind this increase and decrease, big reasons, big picture influences including budget deficits, trade balances, interest rates, financial growth to name a few. Your own research will be the most valuable.
Although the real truth is most don't actually back their very own views on the markets as they don't actually know what the marketplace is going to do. For the money they earn is from the fees they charge out to their customers, management and commission fees generally.
To clarify, I'm not saying individuals operating in finance do not know anything. They are indeed very smart and very clever and earn a lot of respect. But their cash comes from facilitating the mechanics of the system ie. client relationships, doing transactions, and doing sales etc. Not from predicting what is going to go up or down in the marketplace.
Stockbrokers are full of confidence and may bounce a great deal of facts and figures when communicating to future prospects. On the flip side, more details does not always lead to a greater level of market predictability. The information a prospect needs to learn is does that broker generating an income from picking stocks? The answer generally is no. The broker is comfortably getting income from the client fees paid to selling and buying on their own behalf. A market view is easy to attain when it's with somebody else's money. More to the point it may be easier to gamble when it isn't your own pocket fueling that risk.
The specialists within the media give the impression that the markets are easier to foretell than they really are. Watching a reporter on the tv or reading a columnist in the newspaper says that the price is going this way, the commodity is doing this, that as well as the other etc... everything comes across as being easy.
The media put out this sort of message that everything may be forecasted. A message which is persistent and that is easy to be seduced by. No one could really blame you for feeding off this over simplified view and come away thinking 'I could have a go at that, her explanation I could actually make some cash out of that.' The enticing read in the newspaper or report on the tv could make the majority of people fall into a false sense of that the markets are easy to keep one step ahead of.
The media has a job to do... and which is the job of reporting the financial arena so it is not as easy as just placing a hand of blame on their shoulders. But it is what it really is, as in the majority of media... a kind of form of gossip, and unfortunately the job of financial guesswork is in the realms of 'entertainment,' the reader has to find the topic interesting and entertaining to some degree, it must be a little pumped up as well as have the specific gloss to come across in a palatable way for all those watching or reading the story else their attention would just drop off. The financial markets are a difficult beast however the media underplays those difficulties.
Anybody thinking of trading or investing will have their view largely shaped by media reporting. It's important when listening to the specialists that you learn to be critical of what you read and hear.
So if the experts and media are unreliable, how do you learn about markets? The most effective answer is to try and begin to understand what has happened within the past. Like many things homework is everything. Spend some decent time looking into how prices have behaved within the past. I'm not discussing extensive number crunching or numerous time in the library, just researching how prices have reacted to big influences in a few market cycles. To get a comprehension of the dollar-euro rate as an example it is pointless trying to form a valid view without knowing where it has been and why. The euro value has fluctuated over the last few years and you'll find reason behind this increase and decrease, big reasons, big picture influences including budget deficits, trade balances, interest rates, financial growth to name a few. Your own research will be the most valuable.