7 Tips to Help Spot 'Fake' Financial News

Investors and retirement savers can’t afford to fall for false or biased financial stories touted as legitimate news. Learn how to navigate today’s information landscape.

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Unless you live under a rock with no cell signal, your brain processes an extraordinary amount of information every day.

Americans consume five times as much information as they did in 1986 — the daily equivalent of about 174 newspapers — a 2011 study found. (opens in new tab) Outside of work alone our daily intake is 34 gigabytes of information, or 100,000 words, according to a University of California, San Diego report (opens in new tab). That’s roughly the size of To Kill a Mockingbird.

Our brains aren’t equipped to handle such a deluge. This makes it difficult to decipher fact from fiction, or what is relevant to you and what is not — an important distinction when your money is at stake.

Daily headlines often have no bearing on one’s long-term financial goals. So, for long-term investors, most financial media is noise. But these days, the local paper and evening news have been replaced by posts, texts, tweets, podcasts, memes, videos, etc.

The advent of social media has led to a proliferation of false information, or “fake news.” For our purposes, we can loosely define “fake” as misleading, highly biased and/or utterly unrelated or unhelpful to an individual investor’s situation. Some stories are designed to leverage our emotions, which can be dangerous when our emotions are already high, such as during a market downturn or a recession. It can cause investors to consider rash decisions that prove costly.

The simplest way to avoid the noise is to turn off your devices. But it’s far more realistic, instead, to learn how to navigate today’s information landscape. Here are seven tips to help you spot “fake” financial news.

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC (opens in new tab) or with FINRA (opens in new tab).

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Jacob Schroeder, Manager of Investor Education
Manager of Investor Education, Advance Capital Management

Jacob Schroeder is the Manager of Investor Education at Advance Capital Management (www.acadviser.com/ (opens in new tab)). He is also the creator of the personal finance newsletter The Root of All (https://rootofall.substack.com/ (opens in new tab)), exploring how money shapes our lives. His goal is to help people make more informed financial decisions and live happier lives. His writing has been featured in publications such as Yahoo Finance, Wealth Management magazine, The Detroit News and, as a short-story writer, in various literary journals.