The key to good financial decisions is knowing how to sort through the flood of information out there. How do you do that? Ask the right questions. Specifically, these five.
Thanks to new technologies, investing is more accessible than ever. You can buy stocks, bonds and mutual funds with a click of a mouse, or even with an app on your phone. As a result of these technologies, we now have more, faster and cheaper information. This is good news for investors, but is it too good?
Because information is coming at us so quickly — and from so many sources &mash; it isn’t always clear what we should do with it. It’s also not always clear how credible the information is in the first place. What your friend says on Facebook may be old news or, worse yet, clickbait. A TV talking head may be sharing an exaggerated story designed to grab more viewers. And a financial salesperson’s pitch might focus on all the benefits of a product or strategy without a fair look at the potential downsides.
I Bet You Answer This Question Wrong
On top of that are your own biases and beliefs — bits of information you’ve collected and stored through the years that color your thinking unconsciously. You’re so sure they’re true, you don’t even ask questions or do research to check them out and verify.