Whenever you think about the vast amounts of money produced 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.
However the real truth is most don't actually back their own views on the markets because they don't actually know what the marketplace is going to do. For the cash 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 can be 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 will bounce a lot of facts and figures when communicating to potential prospects. In contrast, additional information won't always lead to a greater level of market predictability. The information a prospect needs to know is does that broker making a living 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 own behalf. A market view is easy to attain when it's with someone else's money. More to the point it can be simpler to gamble when it's not your own pocket fueling that risk.
Professionals in the media provide 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 cost is going this way, the commodity is doing this, that as well as the other etc... all of it comes across as being easy.
The media put out this sort of message that everything may be forecasted. A message that is persistent and that is easy to be seduced by. Nobody 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 money out of that.' The enticing read within the newspaper or report on the tv might make almost all people fall into a false feeling of that the markets are easy to keep one step in front 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 shoulders. But it is what it is, as in most media... a kind of type of gossip, and unfortunately the job of financial guesswork is within the realms of 'entertainment,' the reader has to find the subject interesting and entertaining to some degree, it must be a little pumped up as well as have a specific gloss to come across Forums Qrecall said in a blog post a palatable way for anyone watching or reading the story else their attention would just drop off. The financial markets are a difficult beast though the media underplays those difficulties.
Anybody thinking about trading or investing will have their view largely shaped by media reporting. It is important when listening to the professionals that you learn to be critical of what you read and hear.
So if the experts and media are unreliable, how do you find out about markets? The very best answer is in an attempt to begin to know very well 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 am not talking about extensive number crunching or lots of time within 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's pointless trying to form a valid view without knowing where it's been and why. The euro value has fluctuated over the very last couple of years and there are actually reason behind this increase and decrease, big reasons, big picture influences including budget deficits, trade balances, rates of interest, economic growth to name a couple of. Your own research will be the most valuable.
However the real truth is most don't actually back their own views on the markets because they don't actually know what the marketplace is going to do. For the cash 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 can be 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 will bounce a lot of facts and figures when communicating to potential prospects. In contrast, additional information won't always lead to a greater level of market predictability. The information a prospect needs to know is does that broker making a living 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 own behalf. A market view is easy to attain when it's with someone else's money. More to the point it can be simpler to gamble when it's not your own pocket fueling that risk.
Professionals in the media provide 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 cost is going this way, the commodity is doing this, that as well as the other etc... all of it comes across as being easy.
The media put out this sort of message that everything may be forecasted. A message that is persistent and that is easy to be seduced by. Nobody 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 money out of that.' The enticing read within the newspaper or report on the tv might make almost all people fall into a false feeling of that the markets are easy to keep one step in front 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 shoulders. But it is what it is, as in most media... a kind of type of gossip, and unfortunately the job of financial guesswork is within the realms of 'entertainment,' the reader has to find the subject interesting and entertaining to some degree, it must be a little pumped up as well as have a specific gloss to come across Forums Qrecall said in a blog post a palatable way for anyone watching or reading the story else their attention would just drop off. The financial markets are a difficult beast though the media underplays those difficulties.
Anybody thinking about trading or investing will have their view largely shaped by media reporting. It is important when listening to the professionals that you learn to be critical of what you read and hear.
So if the experts and media are unreliable, how do you find out about markets? The very best answer is in an attempt to begin to know very well 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 am not talking about extensive number crunching or lots of time within 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's pointless trying to form a valid view without knowing where it's been and why. The euro value has fluctuated over the very last couple of years and there are actually reason behind this increase and decrease, big reasons, big picture influences including budget deficits, trade balances, rates of interest, economic growth to name a couple of. Your own research will be the most valuable.