When you look at the vast quantities of money made by people 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 know about financial markets.
Although the real truth is most do not actually back their own views on the markets because they don't actually know what the market 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 am not saying individuals operating in finance do not know anything. They're indeed very smart and very clever and earn a great deal 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 will probably go up or down on the market.
Stockbrokers are full of confidence and can bounce a great deal of facts and figures when communicating to prospects. On the flip side, more information doesn't always lead to a greater degree of market predictability. The information a prospect needs to know 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 compensated to selling and buying on their behalf. A market view is easy to attain when it's with another person's money. More to the point it can be easier to gamble when it isn't your own pocket fueling that risk.
The experts in the media give the impression that the markets are simpler to foretell than they really are. Watching a reporter on the television or reading a columnist in the newspaper says that the price is going this way, the commodity is doing this, that and also the other etc... it all comes across as being easy.
The media put out this kind of message that everything can be forecasted. A message that's persistent and which 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, I could actually make some cash out of that.' The enticing read within the newspaper or report on the television may make many 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 isn't as easy as just placing a hand of blame on their own shoulders. But it really is what it really is, as in most media... a kind of form of gossip, and unfortunately the job of financial guesswork is within the realms of 'entertainment,' the reader has to find the topic interesting and entertaining to some degree, it has to 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 may have their view largely shaped by media reporting. It is very important when listening to the specialists that you learn to be critical of what you read this blog article from www.starfiresports.com and hear.
So should the experts and media are unreliable, how do you learn about markets? The very best answer is in an attempt to start to know very well what has happened within the past. Like most things homework is everything. Spend some decent time looking into how prices have behaved within the past. I'm not speaking about extensive number crunching or a lot of time within the library, just researching how prices have reacted to big influences in a couple of market cycles. To get an understanding of the dollar-euro rate as an example it is pointless trying to form a valid view without knowing where it's been and why. The euro value has fluctuated over the final number of years and you will find reason behind this increase and decrease, big reasons, big picture influences including budget deficits, trade balances, rates of interest, financial growth to name a number of. Your own research is the most valuable.
Although the real truth is most do not actually back their own views on the markets because they don't actually know what the market 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 am not saying individuals operating in finance do not know anything. They're indeed very smart and very clever and earn a great deal 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 will probably go up or down on the market.
Stockbrokers are full of confidence and can bounce a great deal of facts and figures when communicating to prospects. On the flip side, more information doesn't always lead to a greater degree of market predictability. The information a prospect needs to know 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 compensated to selling and buying on their behalf. A market view is easy to attain when it's with another person's money. More to the point it can be easier to gamble when it isn't your own pocket fueling that risk.
The experts in the media give the impression that the markets are simpler to foretell than they really are. Watching a reporter on the television or reading a columnist in the newspaper says that the price is going this way, the commodity is doing this, that and also the other etc... it all comes across as being easy.
The media put out this kind of message that everything can be forecasted. A message that's persistent and which 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, I could actually make some cash out of that.' The enticing read within the newspaper or report on the television may make many 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 isn't as easy as just placing a hand of blame on their own shoulders. But it really is what it really is, as in most media... a kind of form of gossip, and unfortunately the job of financial guesswork is within the realms of 'entertainment,' the reader has to find the topic interesting and entertaining to some degree, it has to 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 may have their view largely shaped by media reporting. It is very important when listening to the specialists that you learn to be critical of what you read this blog article from www.starfiresports.com and hear.
So should the experts and media are unreliable, how do you learn about markets? The very best answer is in an attempt to start to know very well what has happened within the past. Like most things homework is everything. Spend some decent time looking into how prices have behaved within the past. I'm not speaking about extensive number crunching or a lot of time within the library, just researching how prices have reacted to big influences in a couple of market cycles. To get an understanding of the dollar-euro rate as an example it is pointless trying to form a valid view without knowing where it's been and why. The euro value has fluctuated over the final number of years and you will find reason behind this increase and decrease, big reasons, big picture influences including budget deficits, trade balances, rates of interest, financial growth to name a number of. Your own research is the most valuable.