Information isn’t just the news that you can watch in TV or read in the Internet. It is everything that helps you in making your decision. You are aware of the fact that in these times firm and quick information is essential. If you get trustworthy information you can rely on it and act in an optimal way. Possessing information quicker than others gives you advantage over other market participants. You can make your decision quicker, which allows you to be one step ahead of other and decide about you strategy without looking at others actions.
Why it is so crucial? Everyone needs quick and reliable information, from international companies through governments and institutions to every single person.
In order to get ahead of other market participants you need to have an edge - something that they don't have. If you get the information that price of company’s share will skyrocket next day, you will probably buy as much shares as you will be able and sell them with great profits. If you receive that information two days later, it will have no value for you as the move has already taken place. Key information is your edge.
Governments spend a lot of money to have intelligence services to be well informed about every single event in the world that can have an influence on politics. Every incorrect or delayed information can have dramatic consequences.
Companies also pay huge sums of money for credible information. Consider mining companies that has rights to extract resources from some area. They are paying hundred of million dollars for tests, which will prove that there are enough resources to start whole extracting process. The value of information is tremendous. If tests confirm that there are enough resources company will start to extract resources and will cover expenditures for tests from its profit. If tests show, that there are not enough resources, the company will only lose amount spend on tests, not few times more in case of exploring without confirmation and lack of resources.
In everyday life you also value quick and reliable information. You would be probably grateful for information that allows you to avoid traffic jam or that helps you pick the best restaurant for a very important evening. Your investment decisions are no different - and in a way that where information is most important as it is often one's life savings that are at stake. Clearly something that should be approached with caution.
Thanks to the Internet the information is ubiquitous, so one should not have any problems getting all the information they need, right? Not necessarily. The point is that you don't want to spend your entire life looking for information to make just one investment decision. You want to spend on research only as much as necessary make best trades and still have time to enjoy your profits. In order to do that you need to have information of highest quality and it should be as close to what you need as possible. This kind of information is rare.
Credibility is the most important feature of information. Only the trustworthy information counts. Moreover it is better to have no information, than inaccurate information that misleads you and causes wrong decisions. Investment-wise, it's better not to take any position than to take mostly the bad ones.
Another aspect of source concerns processed information. Sometimes it is hard to draw some conclusions from raw data. Often it is too time consuming and it is better to use expert analysis. However, you must be very careful. The analyst can be wrong, and in most cases you have to compare conclusions with your own views (as the analysis was not made exactly for you for for some general purpose). It also makes a lot of sense to check the assumptions of the analysis - are they sound and well explained? If not, then caution is advised. On the bright side, an expert can take into account some factors that most investors will probably overlook, but which in fact can influence on future price of asset.
Another crucial factor is time. The sooner we get the information, the better. We have more time to consider all options and make our decision so in fact we are able t o react quicker and use the moment to gain profit.
Again, clearly only the high quality information counts.
So, where can you gain this type of information? Let's examine several sources.
- Mass media are quite good source of information when it goes about current situation in the world, but they deliver information that are popular (mechanical trading funds have already reacted on this piece of news before you read it) and sometimes in biased way, so we would not recommend it.
- Government sources could be viewed as more thorough here, but on the other hand, the information could be even more biased to serve particular political goal (e.g. underreporting inflation in order to get away with printing more money). Additionally, this type of information is available with a considerable delay, when it's no longer tradable.
- Big information agencies seem to be a better choice, because they are competing for clients, so they have to provide reliable information in shortest possible time frame. Still, it's best to have information that is confirmed by more than one source, or that that the source provides thorough proofs of what's reported. Still, while these agencies may appear reliable, they rarely provide information really suitable for particular groups (like gold investors). The information is reliable, but it's not detailed enough to be really useful.
- Free gold-related services available on the Internet are generally much more useful than the above sources simply because they were created with Gold Investors in mind. However in this case the problem is the objectivity as each of these services usually involves just one analyst. Moreover, free essays cannot be extremely useful, because if there were, then their author will sooner or later provide some kind of premium version of the essay. This means that you're not getting the best information either. Additionally, in the vast majority of cases these free services simply mean free essays which means that they are not interactive (not tailor-made) and can sometimes be already outdated when you read them. Consequently, free essays are quite good source of information, but they are definitely not sufficient to make best investment-related decisions and further research on your part is essential.
- Friends are reliable source of information in terms of their will to help you. However, unless they are naturally unemotional investment professionals, the odds are that the information that they provide you with, will not be too useful in terms of its thoroughness. Also, following information from your friends instead of asking where they got it and investigating for yourself may result in unpleasant tensions between you if the situation does not play out as your friend believed it will.
- Premium gold-related services appear to have many advantages and only one drawback. Similarly to free gold-related services, the premium ones are prepared with Gold Investors in mind, however in this case the reliability could be bigger as the premium version of the analysis is likely bigger which allows for discussion of reasons that lead an analyst to believe that something is going to happen in this or another way. The premium services are usually updated more frequently than the free ones and in case of some services they are also segmented. This means that they go one step further in making the analysis more tailor-made by providing analysis for more groups of Investors (e.g. Long-term Investors and Short-term Traders). Some services will also include multimedia / interactive elements that will make the investment / learning process more effective and also more pleasant. At times these services will provide you with additional edge over other market participants by providing access to something that other don't know. The drawback is that these premium services are not free. However, since you are reading this text, it means that you are well aware of the fact that you need to make investments (for example by buying gold) in order to make profits. Consequently, it seems logical that you would need to invest in the best research to increase the odds of making best investment decisions and thus profiting even more.
- Individual consultations with investment professionals are very thorough and very tailor-made way of gaining information, however the problem here is that the information can become outdated quite soon and unless you decide to pay for the consultation on a regular basis (monthly consultations could be quite costly...) it may become useless in just a few weeks.
- None - if you decide to let your investments be handled by someone else (e.g. investment fund manager). The problem here is that you still have to make detailed research on who you should trust with your money. There's also the issue of taking proper care of your money. Cliff (one of our Subscribers) summarized it well by saying that it took me years to figure out that a reasonably smart person who can think for himself can manage his or her own accounts better than a highly educated & highly paid securities account executive who manages 100 or even a 1000 accounts on commission. After all, who cares more how well my account does than I do? Moreover, even if it may not look like this is the case at the first sight, if you calculate how many you're going to pay for managing your money on a yearly basis (commission, outperformance fees, which could be based on generally underperforming benchmarks...), it may appear that this is the most expensive option. Actually, it seems quite ironic that no information at all is more pricey than the high-quality one.
There are many sources for gaining information and as the title of this essay says - information is power. The key point is that not all information provides you with more power investment-wise - only the high-quality information does. If you decide to use only the free information (first 5 points above) that's perfectly fine with us - however please remember to use various sources on information to make sure that what you're basing your investment decisions on, is really reliable.
Still, in our point of view, managing your investment capital (often hard-earned savings) should be done with as big care as possible, and this goal is simply impossible to reach without investing in some professional services (last 3 points above). Assuming that you take your time (rather months than weeks) to do your own due diligence and read all free materials that you can find on the Internet, you can still benefit a little extra from consulting your views with a professional, either directly or through some kind of premium service. The point is that this little extra information can at times be worth thousands of dollars (or perhaps hundreds or millions of them). A long time ago we read that partially informed investor is just as effective, as partially informed surgeon - will only hurt himself and those around him and while we don't think that investment professionals have a monopoly on being correct, this phrase does convey the message quite well.Back