InvestingDaily.com

Account Information

  • My Account

    Manage all your subscriptions, update your address, email preferences and change your password.

  • Help Center

    Get answers to common service questions, ask the analyst or contact our customer service department.

  • My Stock Talk Profile

    Update your stock talk name and/or picture.



Close
FEATURED STRATEGY

This Two-Minute Market Move Could Make You Rich

This Two-Minute Market Move Could Make You Rich[Revealed] How to generate instant income from the stock market. Over and over again. At will. This technique is so powerful – and safe – we’re guaranteeing you can use it to generate $1 million (or more) in retirement cash. And we’ll even send you a $1,000 check to kickstart your journey. Go here for details.

 

Financial Advice: Keeping it Real

By Jim Pearce on July 21, 2017

The March 23, 2017 cover of Time magazine posed the disturbing question: “Is Truth Dead?” 

The question was asked in light of allegations by President Trump that “fake news” was disseminated by media outlets to undermine his election, and counterarguments by the media that Trump himself has spread fake news to confuse the public over his true intentions. Although used primarily in a political context, the issue of fake news is increasingly under scrutiny as it relates to financial media.

That’s due to recent revelations that several seemingly legitimate media outlets had been duped into posting articles by fictitious writers purporting to be unbiased analysts, while others have been accused of knowingly going along with the ruse in exchange for financial gain.

According to a July 4 article in The Washington Post, the unethical behavior included one person “secretly paying writers—some of whom used pseudonyms such as the Swiss Trader and falsely claimed to have MBAs—to produce hundreds of positive articles, tweets and Facebook posts that attempted to pump up the stock prices of specific companies.”

The motivation for spreading fake news, good or bad, about stocks is obvious. Penny stock promoters spin fanciful yarns to drive up the price of their shares before dumping them on unwitting investors. Conversely, short sellers warn of impending disaster to drive down the value of stocks that they have already sold and need to buy back at lower prices to make a profit. Either way, the intent is the same: preying on innocent people who are incapable of discerning what is true from what is false.

The stock market has always been subject to unfounded rumors and flat-out lies, but the advent of the Internet and social media has amplified the impact false stories can have on a company. A story that once took days or weeks to circulate through the smoke-filled back rooms of Wall Street restaurants can now travel around the world in nanoseconds and be read by millions of people without being parsed for accuracy by an editor.

That’s a problem since there is no way to go on the Internet and not be subjected to the purveyors of fake news. Simply because articles show up on credible websites such as Yahoo Finance does not necessarily mean they are legitimate; almost all of them are written by unaffiliated parties that may or may not have a hidden agenda. Consequently, before making an investment decision based on a news story, it’s critical that you understand who has written the story and any potential economic interest that party may have in the subject of the article.

I frequently receive Stock Talk questions from Personal Finance subscribers regarding the advisability of buying penny stocks that to my trained eye appear to be on the verge of financial collapse. A few clicks of the mouse often reveal that a glowing article was recently written by a purported expert in the field professing to have nothing more than a purely academic interest in the company. More often than not, those stocks end up becoming worthless shortly after the author of that article has sold his shares and moved on to the next con.

Fortunately, there are steps you can take to protect yourself from fake news. The Securities and Exchange Commission provides several tips for investors when considering investing in micro caps, or “penny stocks”, at its website: www.sec.gov/spotlight/microcap-fraud.shtml. You also can check up on penny stocks via TheStreetSweeper.org.

Of course, feel free to shoot me a Stock Talk question about a company you’re not sure about and I’ll do my best to steer you away from any situation that looks suspicious. You also can reach our experts via mailbag@pfnewsletter.com.

In case you’re wondering, the company that employs our analysts and publishes Personal Finance has a strict policy of only earning revenue through subscription income. We don’t accept any form of financial compensation from the companies we cover, nor do we allow other parties to use our content for any reason other than its original purpose. We may not always be right, but we’re always honest.


You might also enjoy…

 

Here’s What’s Really Going to Crush the Market

Most folks understand the basic concept of inflation… things cost more money. But tragically, most don’t understand the real implications of what it means for their financial future. 

Or just how dangerous it’s becoming right now. Today.

And there are two reasons for that…

First, the U.S. government’s calculations barely take into account two of the things you and I are paying more and more for every day: energy and food.

Second, since inflation really hasn’t been an issue for the past 30 years here in the U.S., most analysts won’t dare to say it’s on the rise because they’ll suffer professionally. 

But I’ve made a name for myself by always saying what needs to be said. Which is why I’ve prepared a new special report that’ll give you simple instructions on how to protect yourself from the coming storm.

And better still…

It gives you the full story on the six types of investments that are destined to soar 275%… 375%… even up to 575% over the next few years as the winds of inflation flatten the U.S. economy.

You can get your free copy here.

Stock Talk — Post a comment Comment Guidelines

Our Stock Talk section is reserved for productive dialogue pertaining to the content and portfolio recommendations of this service. We reserve the right to remove any comments we feel do not benefit other readers. If you have a general investment comment not related to this article, please post to our Stock Talk page. If you have a personal question about your subscription or need technical help, please contact our customer service team. And if you have any success stories to share with our analysts, they’re always happy to hear them. Note that we may use your kind words in our promotional materials. Thank you.

You must be logged in to post to Stock Talk OR create an account.

Create a new Investing Daily account

  • - OR -

* Investing Daily will use any information you provide in a manner consistent with our Privacy Policy. Your email address is used for account verification and will remain private.