Wall Street knows a thing or two about hoaxes and fraud.
It’s worth remembering that financial markets have been dealing with hoaxes, frauds and fake news for a long time. The wrong response can be costly. Back in the bad old days, faxes and message boards were used to defraud investors.”
Fake news creates confusion; fake financial news can cost you money.
In a survey of 1,019 adults by the Harris Poll for the American Institute of CPAs, 77% said they feel it’s important to act fast to make financial decisions when breaking financial news become available. But that can hurt your financial health.
“Knee-jerk reactions are never helpful when it comes to your finance — whether the news is fake or legitimate — as you’ll be inclined to act on your emotional response without considering the potential long-term impact,” says Marc Roche, co-founder of Annuities HQ in Toronto.
Shayne Heffernan cautions, “Everyone has their own agenda.”
Fake financial news is muddling information. More than 60% of those polled said fakes news has made it more difficult to make critical financial decisions, particularly regarding healthcare, investing in the stock market, retirement and buying or selling a home.
Fake financial news isn’t going away. Here’s how to work around it.
- Hit pause
“Do your own fact-checking before making any financial decision, purchase or any action influenced by an external source, or get a financial adviser to do it for you.”
- Use reliable sources, research who owns each of the major media networks and use discernment when deciding what their agendas are, once you are informed about who is writing the news, you will be able to make better decisions.
Company news releases, for example, may have their own risks, but they might help you recognize when a news site is wrong.
- Recognize red flags
- Manipulating your opinion via melodrama or misinformation.
- Generating clicks (e.g., stories that don’t deliver on their headlines).
- Beware of headlines that are super-exaggerated or unbelievably heartwrenching. Articles with headlines that trade in this sort of “excess” are a big red flag and shouldn’t be shared without further investigation.
- Beware of any media reports that don’t give you facts but the content within the article bring about a feeling of anger or fear. Always question what the ulterior motives could be.
The American Institute of CPAs says to be suspicious of headlines making outrageous claims and articles with incorrect grammar and multiple typos. Inadequate evidence or heavy use of unnamed experts is another clue something may not be legit.
While a wise man once said, “there’s a sucker born every minute,” you don’t have to be the sucker when it comes to fake news if you
Similarly, watch for website spoofing — impersonation of legitimate websites and with content that looks like it came from that site.