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Don’t let fake financial news hit you in the wallet

Do research to avoid falling for a financial

Do research to avoid falling for a financial fake-out, experts say. Credit: Bloomberg News / Michael Nagle

When you think fake news, you think politics. But tall tales have a long reach and include news about stocks. You hate it when you hear untruths about policies; it’s worse when a lie impacts your wallet.

Here’s how to avoid falling for a fake-out.

  • Do your research: “Never make an investment based on the advice of a single writer or magazine or website. The SEC’s EDGAR database provides free access to corporate filings, such as quarterly and annual reports, as well as resources for learning how to read them. Use advice as a starting point, but examine each investment under its own merits,” says Ryan Ermey, a senior reporter for Kiplinger’s Personal Finance magazine in Washington, D.C.
  • Who’s the source? “News needs to be validated by the company that issued the news. Otherwise, it can only be considered a hunch or a rumor. Nevertheless, hunches and rumors often move markets,” says Mitchell Goldberg, president of ClientFirst Strategy in Melville. Read material issued by the company.
  • Investigate the author. “If someone claims to be a financial professional, search to view his or her credentials. You’ll be able to see if someone has received any complaints or disciplinary actions from regulators. If someone writes under a pseudonym be extra wary,” warns Ermey.
  • Be wary of the “inside scoop.” Regulation full disclosure, known as “reg FD,” requires publicly traded companies to release important information to all investors at the same time via widely viewed outlets. Warns Goldberg, “If someone claims to have the inside scoop before anyone else, just tell that person to take a hike.”

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