The Effects Of Current News In The Financial Industry

All types of finance jobs relate to current events. Whether you are a mortgage broker issuing loans at the current interest rate or a stock dealer working on Wall Street buying and selling shares, your job revolves around the current market. However, perhaps you are just like me trying to decide what companies to invest in. Knowing that all financial jobs respond to current events, you should understand the importance of what state the current economy is in. How the overall economy is doing will cause all financial jobs to strategize their planning accordingly. Since financing refers to managing money for the future, current events and how they will forecast the future will play a large role. For example if the economy is prospering, society as a whole is making more money. When society is making more money, people tend to have extra cash to spend. Therefore, when people have more money to spend they will buy more goods, giving companies more business. In this particular state of an economy, companies are given more opportunities to invest their extra cash flow into new projects. If these projects are viewed by the public positively, the value of the company rises reflecting in its stock price. This is an important idea to realize when choosing companies the right companies to invest in.

Another idea to realize about investing your money in the stock market is how expected market news differs from actual market news. The stock market has hundreds of analysts predicting the economic state of participating companies in the market. Because the majority of investors believe or have the same predictions as professional analysts the stock prices are adjusted to these predictions. Therefore, when these expectations are wrong the market can fluctuate rapidly, increasing or decreasing stock prices based on the difference between what actually happened and what was predicted.

Let’s look at one of the companies I am currently a shareholder of, Facebook. On Tuesday night Facebook announced its 2012 Quarter 3 earnings which were higher than analysts expected.  Sure enough Wednesday morning when the stock market opened, Facebook's stock increased to nearly 20%. According to Before It News, "The social networking company said that it now has 1.01 billion users on its network and had earned $1.26 billion in revenue this past quarter, about a 32% increase over Q2 and almost 100% increase over the same time last year." This announcement was great for shareholders of the company. I have owned the stock for about 3 months and this was the greatest increase the stock has had. Check out the graph above, showing Facebook's stock price for the last three months. Notice its closing price on Tuesday before Facebook's announcement. Then Wednesday morning after the news its stock price sky rocketed. Therefore, as you can see the stock market is affected by current events that differ from the markets predictions. You see according to the Outline of the U.S. Economy by Conte and Carr, "In general, economists say, they (stock prices) reflect the long-term earnings potential of companies." After this announcement the stock price went up because analysts had undervalued the success of the company. Facebook has done better than analysts expected, showing their future is brighter having more cash flow.

I've mentioned that all financial professions are impacted by current events. However, since I've been currently researching stock brokers I want to emphasize their relation. Because one of the main skills a stock broker must have is a strong clientele relationship, he must be able to understand the effects of current events. For example, a good stock broker having done the research should have been able to realize that Facebook was going to announce their 2012 Quarter 3 earnings Tuesday night. Therefore, this broker should have predicted the outcome prior to the announcement to help his clients decide whether to invest in Facebook or not. If the broker had realized Facebook was going to inform everyone like they did, he should have informed investors to buy shares on Tuesday. This would have gained investors 20% on their investment in one day! However, it’s easy to speculate after the fact about what your broker advised. All they can do is give an educated guess as to what is going to happen. Check out this video below from the movie the 25th Hour. This entertaining clip demonstrates how brokers predict the market. However, keep in mind this broker is looking after mutual funds where he is in charge of picking the investments for his clients. This is not a job all brokers have.

Reading and Writing Activities of a Financial Broker

Throughout school I've realized English has never been one of my favorite classes. Reading books and writing essays was a task I wish I'd never had to do. However, I've come to realize that most jobs require sufficient reading and writing skills. So maybe that’s why English teachers make students annotate articles and write lengthy papers on our readings? The concept of learning how to write and read will help students become better professionals in their careers. Therefore, since I find myself embarking on the career of a financial broker, I've decided to take a look at what type of reading and writing activities they do. Since a broker's job is to provide investment advice to investors they must be knowledgeable. Brokers must stay currently informed to offer the best possible advice. Therefore, researching companies is a huge part of what brokers do. However, before we go any further lets make sure we know what a broker actually does.

According to Fundamentals of investments, by Bradford D.Jordan states, "A broker is an intermediary who arranges security transactions among investors."Brokers are essentially middle men, matching investors with opposite investment decisions. For example, say that you own shares of Apple stock and you decide that you want to sell your shares. You simply pick up your phone (or go to you online brokerage account) and tell your broker about your decision. After the phone call your investment broker will find someone else who is looking to buy your shares of Apple stock. Then once your broker has found someone to purchase your shares, the transaction will take place and you will receive your money.

Building trust with clients is an extremely important aspect of becoming a successful broker. In order to accomplish this task a broker must be knowledgeable to give good advice. Knowing current issues, like the position the current economy is in, relates to directing a client towards smart investment decisions. Therefore, investment brokers must read a lot of material involving company and industry reports. Understanding how current events affect market decisions is a crucial part in picking the right companies to invest in. Therefore, brokers make their money by investing in profitable companies, so deciphering this relationship between current news and affected companies is crucial. Therefore, learning how to annotate information could be a way to decipher underlying messages that would help predict the future market as a broker.

Another important task to build trust with clientele is regular communication. People feel more comfortable investing their money when they have someone to answer their questions at anytime. When talking with one of the brokers at Scottrade he mentioned that "his door is always open." Communication with his clients is mainly done through email mainly because Scottrade is an online brokerage company. Therefore, sufficient writing skills are crucial. Brokers not having proper writing skills could impact the required "trusting" relationship with clients. Imagine if you were receiving poorly written emails from their broker how would that make you feel? You would probably may begin to doubt who you are sending your money to. Since being a successful broker requires having a good relationship with clientele, they must have professional analytical skills.

The life of an Investment Broker

 




  Oh the grind of college! Why is it that we put ourselves through sleepless nights working part time jobs and taking full time college courses? I don't think many of us can answer that question. I realize the discipline I'm studying is a good fit for me. However, what I want to do with my finance degree is still way up in the air, and trying to figure out my career path right now is all too overwhelming. There is a wide variety of financial careers in today's job market with many that I'm unfamiliar with. Therefore, I decided to research the financial position of a stock broker.

  I recently opened up an online brokerage account with Scottrade, so  I decided to start my journey of discovery there. A few months ago after setting up my account I started investing, with the little money I have, in the stock market. The outcome of my investments have not been that great, but I have realized how interested I've become with the market. I check my stocks several times each day. My eagerness to learn more about the market has increased since I started trading and has helped me stay focus in all of my finance classes (particularly my investment class). Therefore, at this point in time I'm considering working for a brokerage company after I graduate. So I decided to call Scottrade's branch office in Walnut Creek to learn more about a possible career at the firm. I was able to speak with Kevin, one of the brokers at the branch. When I told him about my career uncertainty, he informed me that Scottrade offers a lot of different positions. He explained, "Scottrade offers positions with little experience needed, such as paid internships to divisonal branch mangers." The range of jobs offered consist of customer service related positions in branch offices, like Kevin, to positions in their corporate office analyzing stocks. Kevin also made it sound like the company offers employees opportunities to move up in the company.
     
     I was really impressed talking to Kevin about Scottrade. He seemed to enjoy working as a broker for the company. When I asked him what a broker does? He informed me that a majority of his time is spent processing clients stock and bond transactions. You see a broker is the person who allows an investor to buy and sell securities. If I decide I want to sell my Facebook shares tomorrow all I have to do is click the "sell" button on my online Scottrade account. As the broker, Kevin then has to process the transaction (find an investor to sell the shares to). Kevin also spends time talking to clients both in person and through email and phone. "Customer service is a big part of my job," Kevin mentioned he makes several calls a day checking in with clients to offer assistance with their accounts. Building relationships with clients, Kevin explained allows him to offer better advice. He talked about finding their "risk tolerance", meaning how much risk someone is willing to take to earn more profit. Once a broker has an understanding of a client's "risk tolerance" he is able to advise certain investment funds. To find out your own "risk tolerance" check out this link. and the video below.

    After speaking with Kevin the idea of a broker seemed like a possible career for myself. The  daily interaction a broker has with the financial market appeals to me. I thought to myself, since I'm very interested in learning more about the financial market, a job such as Kevin's would allow me to engage with it everyday. I feel that this job could offer me a great amount of experience and knowledge that I desire regarding the stock market. Therefore, after speaking with Kevin I visited Scottrade's website to learn more about career opportunities and how to get started. I found out that Scottrades headquarters are located in St.Louis, Missouri and Denver, Colorado as well as 500 branch offices nationwide offering a job almost anywhere in the country. However, what was most appealing was that 19% of Scottrades current employee's started as interns with the company. I realize after I graduate, I'm not going to be able to receive a position such as a broker with no financial work experience. Therefore, getting an internship will greater my chances. Knowing that Scottrade offers career opportunities after interning with them has definitely caught my attention.

Creating a Professional Blog

    Viewing professional finance blogs is important for me to understand how to create an attractive blog site. I've been checking the financial blogs Time magazine has rated the 25 best. You can check them all out at http://www.time.com/time/specials/packages/completelist/0,29569,2057116,00.html. What all 25 of these blogs have in common is their information is as current as it can get. For example the presidential debate was tonight and most of these blogs have a post about their opinion on it. Some of these blogs are more colorful than others. Blogs like http://www.businessinsider.com/ and http://dealbreaker.com/ are full of pictures and videos. As a first time viewer it’s exciting to see how creative a blogger can be when designing their site. Other blogs have less color and more words filling the page. Blog sites like http://rortybomb.wordpress.com/ have less color, yet it has a cleaner cut feel. This particular blog site I found was easier to dive into the posts as there weren’t much pictures or videos to distract me. Whether the blog is colorful or not, it's the content that's going to keep listeners addicted. Because these are all finance blogs, everything is linked to financial logic. These blogs had posts linking the presidential speech and what its effects are going to be in tomorrow's market. Everything in a financial blog has to show the correlation between the topic and why it’s important to finance. Otherwise, the post is not worthy for the sake of the blog!

    So how can I create an attractive blog site, such as the professional ones? First off, I realize I'm not going to be able to have as much information on every current events like most of these professional blogs have.  I simply do not have the time to do that much research. Although, I can blog on current issues that have the greatest impact on the financial market. Therefore, right now I want to create a blog that someone can go to and get an overview of what major issues are impacting the market. 

The Genre of Blogging

 

 

 

 

 

A blog is a genre of writing that creates an interactive communal discussion. According to dictionary.com a blog is, “a Web site containing the writer's or group of writers' own experiences, observations, opinions, etc., and often having images and links to other Web sites.” Unlike typical genres of writing that involve only one perspective, blogs allow multiple. The blogging genre encourages readers to comment on other’s blog post to further expand on the issue being discussed. These comments should argue the writer’s own opinion. However, like any good argument there should include evidence along with justified sources. 

 

Perhaps someone posts a blog regarding their views on the presidential debate. Bloggers who are left with feelings after reading the blog would express them by commenting on the post. Discussing their own views on the debate and citing specific sources to help get their point across. These sources can come from many different places. Yet, remember the goal is to express your opinion the strongest. Using specific quotes from the debate perhaps would be a valid source. However, citing what you’re friend told you might not leave other readers believing your point. It is important to remember that a blog setting is online with an audience that you may have never met in person. People will only know you through you’re blogging. Therefore, using sources that the general public would accept as valid is crucial.

 

 

 Blogs are a more casual style of writing and there aren’t many guidelines. I see it as a form of writing that is more conversational than structural. People often times blog about current events like the news. Sure a good blog should attract readers to respond and create a discussion, but how a blogger achieves that goal is up to them self. According to an article called the Blogging Genre, “the genre of a blog is far from clear cut.” The article explains that because the number of blog accounts are rapidly growing each year the genre is changing all the time. Blogs compared to other forms of writing are much more of a current style of writing. Before the Internet, blogs didn’t exist. Thus before the Internet causal writing was far less practiced. Unless you spent time writing for personal enjoyment, you only wrote professionally for your job or school. My point is today people use causal writing several times a day through the Internet. This new genre of literature has essentially revived passion back into writing.

 

This genre of writing allow individuals to become more publicly known then ever before. A good blog will attract more viewers to follow. If you want to get your name out there, start blogging it’s that simple. Create an attractive blog with good appealing information and it may be a place where other bloggers start to follow yours daily. Because of this, blog’s are becoming part of a business strategy. Many businesses have their own blog’s to attract consumers to their company. Businesses also pay bloggers for ad space on their blogs to generate brand awareness. It’s a great marketing strategy, find where there is a large audience and start advertising your business. Therefore, this genre of writing gives job opportunities to successful bloggers.

 

Blogging can also help you acquire an attractive professional online identity. Just like a resume, a blog can be something to persuade an employer that you are the right candidate for the job. You may know that I am studying Finance at San Francisco State University, eager to get a relevant job out of college. Therefore, the purpose of my blog is to create a professional image of myself. I want to be able to explain my passion for finance to an employer by showing them my blog. This genre of writing has allowed users of it to professionally rise above others. It has given bloggers an extra edge if they have created a successful blog. 

 

 

  I read an article at Time.com that listed the 25 best financial blogs. The number one rated blog was BusinessInsider . The site was filled with videos and pictures of current issues that impact particular companies’ value. Viewing this blog, I thought to myself what a great way to understand which companies are doing well and which are not. Now, instead of researching individual companies to try and find current issues affecting their stock price, good financial blogs offer a quick discovery of current impacts. For example, one of the posts from the Business Insider is titled, “P&G, Wal-Mart, Coke and 30 Other Huge advertisers Just Humiliated Microsoft.” A blogger reading this post might gather valuable information on the current condition of Microsoft that he would have otherwise not have heard about. What separates the valuable information a blogger gains from reading a blog from other news related sources is the communal discussion bloggers add to the post. Perhaps others views on the severity of Microsoft’s condition would be mentioned, giving readers a more open minded reaction.

 

After viewing other financial ranked blog sites, I have discovered current news is highly important. Staying consistently updated with current information will attract more followers to visit a blog. This genre of writing thrives on participating readers. Therefore, the more readers who visit your blog, the better chance comments will add to the post. Creating an online discussion that represents multiple perspectives in an online community, that will turn your website into a successful blog.

 

References

http://serendip.brynmawr.edu/exchange/node/2525,

 http://www.businessinsider.com