As Yogi Berra once famously said, "It’s tough to make predictions, particularly about the future". So why read financial news that is packed with forecasts, most of which will not come to fruition?  

Financial commentary can be of tremendous benefit, however its value is not in its accuracy, but rather the lack thereof. Beginning investors are dangerously susceptible to narratives. They can easily be convinced, either by alluring tales that appeal to their greed or frightening ones that trigger their fears, that “this time is different.” Because the standard investment wisdom no longer applies, they are tempted into making portfolio changes. Such trades are unlikely to be successful.

Experience, however, tempers judgments. Over time, investors learn not to expect financial certainty, that the current news cycle will soon be replaced by another, and that the prognostications of experts are to be consumed with many grains of salt, if not an outright spoonful. That process is hastened by education—in particular, by reading what people said and thought at a given time, and then later considering the correctness (or not) of those beliefs.

 This week's highlight article from Morningstar makes the case for keeping financial news on the reading list, despite the bad predictions. 

Why Read Financial News? (Morningstar)

 International Hedge

What should investors expect next time “hard-landing” fears resurface? Given today’s starting point, international equities may hang in better than the U.S. (if the main concern is a U.S. recession): international equities still have double their long-run discount (33% vs. 16%). 

Why it matters: Against this environment, particularly one with ongoing recession anxiety, investors could not only to capture more upside than the U.S. from here but also potentially to hedge more on the downside during U.S.-driven corrections.

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