Welcome to Dividend.com. Please help us personalize your experience.

Select the one that best describes you

Thank you!

Check your email and confirm your subscription to complete your personalized experience.

Thank you for your submission, we hope you enjoy your experience


Pricing
Go Premium Now
Login
Best Dividend Stocks
Ex-Dividend Dates
High Yield Stocks
Strategies
Tools
Articles
Premium
Advisors
Guaranteed Income

Market Wrap Up image

News

Market Wrap-up for Apr. 2 - Were You Fooled on April Fool's?

Tom Reese Apr 02, 2015


With so many fake news stories proliferating yesterday due to April Fool’s, all too many investors were duped into believing false rumors.


The modern world is a strange place. Blogs, independent news sites, social media, and other platforms offer a lot of alternatives to mainstream media, which is good. They also offer a whole lot of bad information, which is, well…bad. The worst part is, people take everything seriously, when they should actually be skeptical about most of the things they read online.

Case in point: yesterday, electric car maker Tesla published a satirical press release for April Fool’s day titled Announcing the Tesla Model W. The tongue-in-cheek post offered some quick details on the company’s supposed latest product - a watch (clearly a dig at Apple (-link" href=“/dividend-stocks/technology/personal-computers/aapl-apple-inc/”>AAPL ) and its imminent release of the Apple Watch). The semi-funny article was just one of many similar posts published around the web on April 1, a holiday I’ve termed the “Worst Internet Day of the Year.”

Here’s the kicker though: Tesla shares actually made a late-day move when the press release was published. Whether it was actual humans responding to the release, or simply a bunch of algorithms programmed to buy Tesla shares when a press release contains a certain combination of words, the fake article had real-life consequences.


Fake News is Real News


Even when news is completely fabricated, if people believe it, react to it, and share it with others, doesn’t it begin to have actual credibility? How, then, does fake news really differ from real news?

Albert Einstein has been quoted as saying “If the facts don’t fit the theory, change the facts.” We see this phenomenon all the time in the media.

People are naturally drawn to news sources that fit their preexisting biases. It doesn’t matter if the news source is credible or not, or if the people writing or talking about topics are qualified to do so. News has devolved into storytelling, because again, people are attracted to stories they already believe.


Fact-Based Investing


I’m not saying you should stop reading the news entirely. In fact, far from it. Investors should read as much as possible, from at least a few key sources they trust.

What I am saying is that your investment decisions better be based on facts. Facts like “This company has raised its dividend for 25 straight years,” or Wal-Mart tends to outperform the wider markets during recessions.

So have fun with all the fake news out there. In most cases, the risks of believing lies or mistruths are small. When it comes to investing, however, make sure you’re taking a much more fact-based approach.

Be sure to follow us on Twitter @Dividenddotcom.

Popular Articles