Do you have any idea why you follow the news?
We have a strange relationship with the news. It depresses us, we know it drains us with its constant forecast of bad, worse, and even worse, but we can’t stop following it. In a way, we are addicted to that constant stream of chatter in our lives.
And then there’s the sensationalism of many news outlets. “If it bleeds, it leads” is a tacit rule: if there’s bad news, put it on the front page – the gorier the better. So no wonder we have the feeling the news is biased towards negativity: accidents, catastrophes, dangers – they sell…
We feel we should follow the news, that it’s important to be an informed citizen. But if we have no strategy to use the news, we end up being used.
But there is a way to follow the news to your advantage…
Focus on news you can use
I follow finance news because to me, they are not just another announcement about Merkel’s statements and Greece’s predicament. Finance news are industry news to me, they are what I need to do my job.
On a daily basis, I make sense of the latest developments in finance and the economy. I know how to do this because I’ve studied it, and not only in college. I didn’t stop studying when I left college. Which means, you don’t necessarily need a college degree to learn more about finance.
It’s never too late to start.
There is a big difference between consuming finance news because it’s the done thing, and constantly educating yourself about finance. In the first case, the news just goes in one ear and out the other and you never really know what to think of anything. In the other, following the news becomes part of a bigger endeavour to learn and educate yourself. So it’s balanced with other sources, other authorities.
You relinquish the fallacy of “if it bleeds, it leads” to go into more long-term learning. You are able to make hypotheses and suppositions. You are able to develop likely scenarios, based on the news. Because you understand the ramifications of the news, you know where to fit a piece of news in its wider context.
You perceive the news, not as a constant flow of fragmented, random bits, but in the context and the perspective of what you know.
And as they say, knowledge is power
As a trainer, I use the news to demonstrate to training participants how financial markets work, how they are likely to react to events. I find it extremely gratifying when a trainee tells me that, as a result of attending my training, they now understand the news better, and they can make sense of it.
Suddenly news stops being this annoying background noise that brings you down, and it becomes intellectual stimulation instead.
When I’m conducting a training in introduction to the financial markets, we analyse how the market is going to react to a certain piece of news and we try to imagine possible scenarios.
Then, when we resume the training after the lunch break, we check the news and see how the markets reacted: were our predictions borne out? Were we completely off the mark? Or did what we expected to happen, actually play out in front of us?
This is what it means to follow the news in their context: you add perspective and are actively studying the news instead of passively consuming them. This is what you need to be able to act on the news.
This is why I am regularly featured in the media to give a commentary on latest events. I try my best to give listeners that perspective, so that they can see the wider picture, and not just the doom and gloom. If you hear that the market is falling, most people will interpret it as “the economy is experiencing difficulties – things are very bad, people are going to lose their jobs”.
Whereas the two are not related in the direct way most people think they are. If you hear that GDP is not growing according to predictions, it does not necessarily mean that businesses around the country are closing down and letting go of their employees. But you can only know what it means if you know a bit about how GDP is calculated and what it reflects about the state of the economy.
Focus on taking action
I choose to focus on finance news. Ask me what happened in finance in the last 24 hours, I will rattle it off. Ask me who was wearing what at the Oscars, I will draw a blank. I choose my news. And this is not to say that “who was wearing what at the Oscars” is useless or shallow news. It is for me. For a fashion designer, it will be vital, both to keep up with trends, and to find inspiration.
- Choose your news
Instead of passively consuming news, only consume news that is useful to you. In other words, limit the amount of news you consume. Deliberately choose which channels you will take your news from – and by channels I’m not just talking about TV channels. Any “thing” that brings news into your day is a channel. Your chatty neighbour is a channel. And if there is a certain radio show or newspaper column or even individual that depresses you, you may want to avoid them! There, you’ve chosen to shut out a channel!
- Limit input to what you have carefully weighed
This is why you might want to avoid general news channels, and focus on niche or specialised channels, where news are filtered through a lens that is relevant to you. You don’t consume news just for the distraction they provide. You want to consume news that you can actually act upon.
So what is your objective? Learning more about the stock market? How about taking your news form the Financial Times or Bloomberg? Creating your business or improving your existing business? How about tuning in to Inc. or Entrepreneur?
- Raw material, or commentary?
You might choose to consume news very sparingly, and focus more on competent news commentary. Is there a columnist, a radio host or TV presenter you find particularly good and enlightening? Listen to them. They will stimulate you to find new ways of seeing the news.
And once you’ve chosen your news, remember to take action. Of course, you cannot change the world single-handedly. But you can always do something to improve the world in which we’re living. What can you do? What do you want to do? Every little helps.
Yes, but how exactly do you take action?
Let’s take the example of news that’s not quite scandalous but still slightly depressing. Something that will make you shake your head and disapprove. Something that will grate and irk. For example, the fact that many high-school students leave school with NO IDEA how financial markets function and how the economy influences their lives.
When I realized this, I decided to do something about it. It might not be enough to solve the problem, but it led to the creation of a teaching module, available to download for free, called “Wall Street to the classroom”. I created it to explain in a jargon-free way how financial markets work, and the audience I had in mind was specifically high school students and their teachers. The module consists of several videos and handouts.
Maybe it won’t be enough to reverse the tide. But still, it’s freely available on the web, and I hope it goes towards helping young people get rid of their misconceptions about the stock market.
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