Do you find investment reporting in the media confusing? I do, even though I've been doing it for too long. So here are some tips to make sense of what you see and read.
Perhaps the most fraught are those breathless television financial shows where lots of space needs to be filled, and much of it is taken up with stock market updates. Sadly for the good folk at Breathless Television Business News, markets spend most of their time moving up and down at a steady pace. The presenters try to sex it up with dynamic adjectives such as "stocks surged" or "stocks plummeted", followed by a big sounding number, such as, "the Hang Seng surged by over 200 points today".
If that happened, share prices would only have risen by about 1 per cent, which sounds a hell of a lot less interesting.
Another tactic for sexing up stock market news is to frame it in a fairly meaningless time frame. "The market recorded its best day in the past six days of trading." Daily trends tell you very little - it's the moving averages that count. In other words, to get a sense of stock market direction, you need not only the closing prices, but the average movements over the day, and over longer than just a few days.
Stocks tend to occupy a lot of breaking financial news space. But the same strictures apply to other investments, particularly currencies that fluctuate in price over any given trading day. Individual traders get frustrated when they fail to achieve the prices quoted on the ticker tapes running across the screens of business shows. The reason is that these prices are only available to really big traders. The average individual investor always gets a poorer deal. But at least the price movement seen on these screens gives a sense of direction.
But it would probably be best to try and shut out a lot of the other noise on market movements, because some of it is downright misleading.