Finding Sources of Information You Can Trust About Investing
By Dale Gillham |
The 2023 ASX Investor study claimed that 34 per cent of those surveyed indicated that their top challenge was knowing which sources of investment information to trust. In addressing this challenge, I believe there are two issues that need to be resolved. The first is what investors need to know to be able to assess what is trustworthy information and secondly, how do they identify trustworthy sources of information to invest confidently?
How do you identify trustworthy sources of information?
It is human nature to trust what someone reads, but that doesn’t make that source of information trustworthy. Investors with little knowledge who watch YouTube or read books tend to have certain misguided beliefs about investing that give them a false sense of what they really need to do. As such, in order to assess whether the information is trustworthy, you need to educate yourself on the subject. Without this step, moving on to the second issue of being able to identify trustworthy sources is futile.
Investing is exciting but it can also be scary, which is why the quality of information you rely on will determine your success. Reliable sources include reputable financial news services, such as the Financial Review or big brokers like Commsec, and websites, such as Bloomberg. As these organisations have to protect their reputation, you can be assured that what they report is high quality, as they have trusted financial experts and analysts contributing information.
It’s also important to consider different opinions, as this helps to compare different types of investments and strategies when assessing an opportunity. Websites I regularly visit include ASIC’s Money Smart, the ATO, and the ASX. I also frequently visit the Australian Bureau of Statistics (ABS). These bodies offer trusted sources of information, such as economic data and articles that are written in an unbiased tone.
There is some value in investment reports although these are harder to assess unless you educate yourself because this is the one area where investors make the most mistakes. While these reports do provide comprehensive analysis, there is often bias in the research.
I would be doing investors an injustice if I didn’t also include the sources of information to avoid. While community chat forums and social media platforms can provide some useful information, I urge investors to use these with extreme caution. There are many self-proclaimed "experts" who run on ego and may not have the expertise they claim.
Remember, the quality of information you rely on will greatly impact your risk and success. Therefore, it’s essential to spend time educating yourself, so you can distinguish between trustworthy sources and potentially misleading or biased sources of information.
What were the best and worst performing sectors last week?
The best performing sectors included Consumer Discretionary up 0.77 per cent followed by Information Technology and Energy, as they were both down 0.04 per cent. The worst performing sectors included utilities down 3.41 per cent followed by Real Estate down 2.48 per cent and Financials down 1.72 per cent.
The best performing stocks in the ASX top 100 included Treasury Wines Estate up 5.56 per cent followed by Domino’s Pizza up 5.04 per cent and Aristocrat Leisure up 4.27 per cent. The worst performing stocks included Resmed down 8.30 per cent followed by AGL Energy down 6.60 per cent and Challenger down 5.57 per cent.
What's next for the Australian stock market?
Last week the Australian stock market once again did the unexpected, as it fell away after looking bullish the prior week with the expectation that it would continue to be bullish, at least for a couple more weeks. After rising slightly last Friday, the All Ordinaries Index ended the week down just over 1 per cent, which may be good news.
If it is only one week down and the market starts to rise again this week, I believe it will most likely continue to rise over the coming month and challenge the all-time high. That said, if the market falls away this week, it’s likely it will continue to fall for at least two to three weeks before turning to rise.
How the market unfolded last week is why I continue to caution investors to manage their risk and not jump into stocks believing they are cheap or to buy in the dips. Be patient and pick good stocks because the opportunities will come.
For now good luck and good trading.
Dale Gillham is Chief Analyst at Wealth Within and international bestselling author of How to Beat the Managed Funds by 20%. He is also author of the bestselling and award-winning book Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in all good book stores and online.