The proliferation of the media over the past decade has meant private investors now have access to the same information as the professionals, at the same time. This has enabled private investors to react more quickly to news announcements and even encouraged some to give up their day jobs and trade shares every day, known as day trading.
The amount of information available on the stock market, whether through newspapers, magazines or the internet, is enormous. But unfortunately not all of it is reliable so you must tread carefully.
Newspapers and magazines
The internet
Television
Stockbrokers and investment banks
Newspapers and magazines are the traditional source of information on companies. Most national newspapers have City and business sections that cover the main business stories and stock market reports. You will also find personal sections in most Sunday newspapers and in a few titles, on Wednesdays.
There is a difference between the content of daily newspapers and the Sunday papers. During the week newspapers tend to focus on major company announcements, such as mergers and annual results, and takeover rumours.
The Sunday newspapers however, do not have this option as companies do not make any announcements on Saturdays. Instead these papers focus more on analysing the previous week’s news and getting exclusives stories that will dominate the week ahead. They also often publish share tips which can influence the next day’s trading.
The money or personal finance sections of newspapers cover a wide variety of subjects, including mortgages, loans and investments. They usually carry some advice on which shares, funds and stock markets the professionals are favouring.
A number of magazines are also available covering shares, funds and other investments. You can expect to find detailed analysis of companies, stock markets and other investments such as unit trusts and investment trusts.
If you are interested in a particular sector of the stock market it may also be worth subscribing to a specialist magazine covering that industry. These publications, known as trade papers, are not usually available in newsagents but are subscription-only so you may need to hunt around to find them.
The emergence of the internet has revolutionised the world of financial reporting. Rather than waiting until the next day to get news on the latest events affecting investors, you can get it minutes after it has happened.
A number of websites focus on producing regular stock market reports and company stories throughout the day. You can also get detailed news on what investments the professionals have been making. On this web site you can get the full regulatory news service, an editorial news service from AFX and further news from Citywire.
In addition to news, many websites offer tools that allow investors to monitor the value of their portfolios and analyse the performance of individual stocks and funds. Some of this information is free but if you want more detailed information, you will usually have to pay a subscription. Check out the Portfolio Service on this website.
A number of websites also publish regulatory news. These are official announcements companies are required to make on any events that can influence the value of their shares. Many of these news stories are published before the market opens, often at 7am.
The internet has also improved the information you can get from companies themselves. Most companies have websites that publish the latest news announcements, some of which you may not pick up elsewhere.
Before you use any website make sure you check its credentials. While there are many excellent financial websites, there is nothing to stop any individual setting up a webpage and publishing any information, whether reliable or not. Most reputable websites will have information on who they are and you will find many are owned by major publishers or stockbrokers.
Mainstream news programmes tend to cover only a small amount of business news, normally reporting on the performance of major stock markets around the world and announcements by major companies, such as redundancies or mergers. There are, however, a number of specialist programmes to watch out for, such as the BBC’s Working Lunch and The Money Programme.
If you have cable or digital television you can find more in depth financial news through specialist channels such as CNBC and Bloomberg. These channels cover a wide spectrum of financial news and can often be more technical than the mainstream channels as they are typically watched by professional investors.
Stockbrokers and investment banks produce a vast amount of research of companies, stock markets and economics.
Traditionally private investors have only been able to get information put out by their stock brokers, leaving the world of investment banking analysis available only to the professional. However in recent years these boundaries have blurred. Many newspapers and magazines publish summaries of investment banks’ research and some investment banks actually make their reports available for free on the internet.
You should remember that the recommendation an analyst puts on a company will affect its share price very quickly and can become irrelevant within hours. This is because the analyst will usually say a stock is a ‘buy’ within a particular price range. If the price moves above their targets the improvements the analyst expects may be ‘priced in’ and so the shares not worth buying.
But analysts’ reports are always worth reading, even if the recommendation is out of date. The reports usually contain a great deal of useful information on the company and how its business is developing. They also often look at how the company rates against its competitors.