Should I be wary of fake news in the business sector?
Great question! I wish there was less financial news in general, real or otherwise. My suggestion is to work with a financial advisor who has your best interest at heart (the word fiduciary is used here often) and create a low-cost, diversified portfolio of mutual funds and ETFs that makes sense for your time horizon and risk tolerance. Revisit the portfolio 2-3 times per year to make sure the percentages of investments are where you want them. Keep the investments no matter what is happening in the news. Remember, you have to suffer through the hard times to benefit from the economy's growth in good times.
After you have your portfolio set, turn off the financial news and watch HGTV, Walking Dead, or other entertainment of your choice.
This is a very timely question, unfortunately. I think that there is fake news in about everything. Everybody has a bias, and that includes the government, the media, and the private sector. Even colleges, which are supposed to be centers of free thought, push agendas. There is no “independent watchdog,” because everything has become politicized.
However, just as you have “real news” and “fake news,” I think you have “real politics” and “fake politics.” I don't think all agendas are equal. Some uphold what I consider to be true American ideals and values, and others don’t. I tend to place more credibility in those that do. At the very least, I give them a higher priority.
Therefore, my primary sources for news, both economic and in general, are the Wall Street Journal, Forbes, and Townhall. I still pay attention to what is said on CNN, the NY Times, and other non-conservative outlets. While I may fundamentally agree with the outlook of my primary sources, it is good to keep them, and myself, honest.
In the big picture, it may be for the good that we have to “take sides” in our news. It forces us to take a stand and to defend it. I think essential to our responsibility as citizens is to be able to identify the issues we are facing as a country, and to prioritize them. I grew up in a family that just turned on the TV and let Walter Cronkite tell us what was happening. Now we have to find out for ourselves. Nothing wrong with that.
Wow, this is a loaded question and I will probably get some flack for answering, but here goes. You always need to do your due diligence and verify the source and the data. This is not a new phenomenon BTW, just the phrase "fake news" is fairly new. Slanting economic data to suit someone's story has been around for decades, but in my opinion, has gotten much worse.
Most media/news outlets today are marketing arms for their advertisers. So yes, at the very least, the news is slanted. Whenever I read a periodical or newspaper, I always look at the biggest ads to know who is paying their bills first before reading any of the articles. Then, when I look at the articles, surprise, the articles many times put the products or services advertised in a good light.
Financial news is no different. I read many financial journals, and many times their advertisers are insurance companies. And wouldn't you know it, there are articles telling you why annuities are the greatest thing since sliced bread. Also, did you know that the on the financial news you watch on TV, many of the money managers they have on are "pay to play." They pay, say $2,000, for a 2-5 minute hit so they can then say they are a contributor and then put the video clip on their website.
Regarding economic data, our own government reporting agencies puts a positive spin on the data. For instance, the Bureau of Labor Statstics (BLS) has changed the way they count employment data over 10 times in the last 20 years to make unemployment appear artificially low (compared to the way they used to count). Case and point, they didn't used to count a part-time job as a new job over a decade ago. That has changed, and with all of the required benefits companies need to provide for employees, there has been a push by companies to fire a full time employee and hire two part time employees (under 29 hours for qualify) to do the same job. But this is now counted as one net new job. So, as companies are laying off full time employees for part time employees, the unemployment rate is declining with no corresponding rise in productivity. BTW, I am not being a Debbie Downer and this hiring trend appears to currently be reversing.
But whenever you are given economic data, you must analyze the data itself, not accept the headline. The numbers are in the eye of the beholder. And always consider the source. This may be over-skeptical, but I always want to be a cynic when analyzing financial or economic data. Then when I come across something I analyze that looks positive, I am confident due to the fact I was skeptical to begin with.
I know I upset someone writing this, but hope this helps. Dan Stewart CFA®