Should you trust financial analytics? When the forecast may be wrong

Now financial analytics has gained considerable popularity, experts in the field of which give their forecasts not only in thematic publications, but also in the media and Internet sources. An important question in this aspect will be how accurate such forecasts can be, and whether they should be trusted.

Specificity and principle of operation of financial analytics

This science is a sphere of analysis of current trends in the financial condition of international markets for currency, real estate, securities and other things. Since this kind of analytics is a very profitable profession, there are now a large number of independent financial experts who make analyzes and forecasts of the current situation and cover their findings on the Internet and in the media.

In addition to the positive aspects that distinguish such a popularization of financial analytics, there are also not too optimistic trends: experts’ forecasts do not always come true, which leads to the loss of investments by many people who trusted the information received.

Important!

The reason for this situation can be the huge popularity of this profession: specialists of not very high professional level begin to engage in analytics, showing poor forecasting results and thereby discrediting the very concept of this area. In addition, forecasts may not come true for objective reasons, not the fault of analysts.

When do predictions fail?

Financial analytics is a complex science, and how accurately the analysis of the current situation is made, and whether the forecast will come true, depends on a number of factors:

• The level of professionalism of the expert himself.
  Any of the forecasts appearing in the press or on the Internet can be made by a beginner or an amateur. Ordinary journalists who do not have the necessary qualifications often try themselves in this area;
• objective factors.
  In the financial sector, unforeseen situations may arise that can radically reverse existing trends. In particular, long-term forecasts are affected by such circumstances;
• Analyst bias.
  An expert can simply act in the interests of certain participants in financial relations. For example, if he works for a company specializing in the sale of real estate, the analyst may be "ordered" to predict the growth of prices in this industry. In addition, government agencies can order the compilation of a certain forecast in order to reduce panic among the people due to destabilization of the currency or in connection with other problems.

Considering all these aspects, it is important to know that the information provided by experts is, of course, valuable for all participants in the financial market, but none of the specialists is fully advised to trust.

First of all, when receiving information of an analytical nature, it is important to delve into the nature of financial phenomena that are fundamental in the current events. It is also important to learn how to make your own predictions by comparing the predictions of various experts.

Of course, it is best to listen to trusted analysts, seeking information only from specialized sources. Being interested in such global trends as the state of the oil market, gold prices and international currencies, it is advisable to pay attention to the forecasts of global analytical companies.

In general, financial analytics can only benefit those who use it competently and responsibly, not being afraid to check the information received and independently analyze it, comparing all existing facts.