Change the Way You Read the Financial News Why bother acquiring financial information? That's might be a valid question if you aren't heavily investing in the stock market. But, that short-sightedness can put your financial future in jeopardy....

Why bother acquiring financial information? That's might be a valid question if you aren't heavily investing in the stock market. But, that short-sightedness can put your financial future in jeopardy. After all, learning about finances can help you overcome your fear of budgeting, avoid costly mistakes, and how to protect your hard-earned cash.

But, where exactly can you go to learn about finances? Well, taking a course, reading books, and listening to podcasts are all effective. However, if you want to stay updated on the latest news and analysis, you're going to have to consume financial news.

Here's the problem with that. There is so much content out there that it's not only overwhelming, you may also be getting poor financial advice. And, even those who have already narrowed down their sources are being shortchanged.

Case in point, financial reporting is still hanging out in the 20th Century. Instead of focusing on financial statements, Vijay Govindarajan, Shivaram Rajgopal, Anup Srivastava, and Luminita Enache argue in HBR that financial reporting needs an overhaul. First, "firms must provide information on revenue and its drivers." Secondly, there should also be an emphasis on a "detailed statement on outlays, presented in three broad categories," the amount spent on supporting current operations, investments in future-oriented projects, and a list of extraordinary items.

With all that being said, it's time to change the way you read financial news — regardless if you're just getting into finance or consider yourself a seasoned vet. And, here are the best ways to get started.

Read stuff you'll disagree with.

Charlie Munger, Warren Buffett's investing partner, once said, "I never allow myself to hold an opinion on anything that I don't know the other side's argument better than they do"

Of course, reading any type of news that you disagree with is easier said than done. Between confirmation bias and algorithms that suggest sources to you based on the content you've previously consumed, you may be stuck in a bubble.

What's more, it's not natural.

"You have to force yourself into it, explains Morgan Housel at Collaborative Fund. "But even that's not good enough, because the most attractive opposing views are written by idiots, amateurs, quacks, and salesmen. They're the easiest to shoot down, allowing yourself to say, "Ah-ha, the other side is wrong and therefore I am right.'"

Despite these challenges, it's crucial to "seek out opposing views from people whose thought process you respect," says Housel. "That probably means people who you agree with on other topics. If you can say, "I know you're reasonable because you and I agree on X. So why do we disagree on Y?' … boom! You're a step closer to reasonably figuring out the opposing view."

Go old school.

With so much information at your fingertips, why would you want to subscribe to a newspaper? Aren't they obsolete? No. They couldn't be further from the truth.

You don't have to have an actual paper delivered to your door each morning. You could subscribe to digital options via the paper's website or app. Why? Besides getting you into the habit of reading, you're able to get the news without getting distracted by modern inconveniences like social media.

"Better yet—make it your local newspaper," adds Harry Guinness for Popular Science. "Not only will this keep you abreast of national issues, but you'll be able to keep tabs on what's going on in your own town, too."

"Many newspapers have a lot of articles tucked away behind paywalls," he states. "And you know what? Good. To produce well-researched, informed, and relevant stories, journalists have to be paid."

"Subscriptions are normally only a few dollars a month—and a small price to pay for important news stories and purging a bit of social media from your life," Guinness writes. "If you really need to stay in the loop, you can even turn on push notifications for breaking news."

Still not convinced? Reading the newspaper develops logical thinking. And, it's been found that college students have used newspapers as a tool to develop critical thinking in science classes.

Mix up your content.

Piggybacking off the previous point, you shouldn't completely ignore amateur content, such as financial blogs. Newspapers, and other legit publications like The Economist or Wall Street Journal, often create in-depth and factual content. At the same time, because they have deadlines and quotas to meet, they might also spin a sensualized headline from a non-important story.

Not only is that frustrating, "a misleading headline hurt a reader's ability to recall the article's details," writes Maria Konnikova in The New Yorker. Opinion pieces can also impair "a reader's ability to make accurate inferences."

Bloggers, of course, can also be guilty of this. However, unlike professional journalists, they don't have to publish an article if they don't have anything valuable to say. Moreover, reading "amateur" content is usually written in a language that you can more clearly understand. And, it offers a different perspective and outlook on finances.

Overall, try to have a blend of both professional and amateur financial news.

Always question financial gurus.

The biggest gripe that I have with financial gurus, think Dave Ramsey or Suze Orman, is that they often take a one-size-fits-all approach.

For example, they will inform you that you need an emergency fund or side hustle to pay down debt. While sound advice, they aren't applicable to everyone. I mean how can a single parent working 40 plus hours per week have time for a side gig, as well as, be able to build a hefty emergency nest?

I'm not saying that you should completely ignore their advice. Instead, take it with a grain of and determine whether their advice applies to you or not. After all, finance is usually a personal matter.

Stop wasting your time on nonsense.

A portfolio manager once told Robert J. Martorana, CFA, "that half the research on my desk was a complete waste of time." His advice? "Figure out which half is garbage and you've just doubled your productivity."

"His point was that most research is backward-looking rather than predictive," clarifies Martorana. "Reading obscure financial information may look and feel like productive work, but most of this content has little chance of leading to better results."

And, yet, that's exactly what many of us do. We "plow ahead, reading news and research until our eyes turn red," adds Martorana. "After all, reading is easier than critical thinking, and it may impress people if you are up to date on a wide range of financial subjects."

"Rather than reading less, portfolio managers must learn to rapidly detect what is nonsense and move on," suggests Martorana. "It's a necessary skill when confronted with the hype and sensationalism now masquerading as news: press releases that spin the facts, earnings reports that ignore basic arithmetic, and management explanations that test the boundaries of probability."

And, yes, it's gotten even worse with social media and investment blogs peddling pseudo-news and pseudo analysis. However, you can practice how to skillfully read financial news by asking the following three questions;

• Is the article based on data or opinion?

• Is it descriptive of past conditions or predictive of the future?

• Does the article have a testable hypothesis?

Don't compare yourself to others.

Sometimes when reading financial news, you might feel a little dejected or nervous. For instance, you just read an article about retirement. And, you realize that you are nowhere near to what experts say you should have saved by now.

While this is concerning, use that information to generate ideas on how to change that. Look for content regarding how people planned for their retirement. And, use their successes and failures as inspiration to design a retirement plan tailored fit for you.

You don't always have to take action.

"This might be the most important," Housel writes for The Motley Foul. "There are thousands of news articles published every day. Very, very few of them should ever compel you into action."

"Quarterly earnings news stories rarely provide anything substantive enough to cause you to buy or sell," he adds. "Same for industry trade news, analyst upgrades and downgrades, and — especially — economic reports."

"Most financial news should, at best, be treated as something that incrementally helps you understand the big picture." What if you're "tempted to tweak your portfolio after reading" the news? "Do your future self a favor and read less of it.," advises Housel

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