To make profitable financial decisions over the long term, investors need access to research tools that utilize proprietary indicators and large amounts of historical data. These factors are critical to helping investors reveal the patterns and trends underlying global financial market activity.
The opposite is also true: using cookie-cutter tools and basing decisions on short-term dynamics can minimize the value of your research and increase risk. All without improving the chances of seeing a healthy return.
This raises the question — “where can investors find research tools with enough data and unique indicators to gain the necessary long-term, historical perspective?” We share answers below, starting with an exploration of data sources that ought to be avoided.
Not All Market Data Is Created Equal
While large amounts of market data are critical to identifying patterns and trends, not all data is created equal.
Let’s get the obvious out of the way. It’s not a good idea to accept financial advice from a stranger on the internet or at a bar. Less obviously, financial media can sometimes be a poor source of market information, with data sometimes being misrepresented for the sake of sensationalization. Financial media also tends to attract pundits who make large claims and predictions without context or substantiation. Even reputable financial news websites may only provide a limited scope of information.
At the same time, any analysis you hear — even from untrustworthy sources — can have value. Even if the conclusions are false, they may provide insight into how other people are thinking about a specific economic data point, or certain stocks, bonds, or commodities. This can be useful, as consumer perception impacts financial market trends.
So, what data can you trust? Performing due diligence means that you should never place your complete trust in any single data set, research methodology, or tool. However, the value of robust data sets and proven research tools cannot be overstated. It’s also important that the data is reliably sourced. For example, when looking for economic data sets, trusted government agencies such as the United States Federal Reserve provide free and publicly available information. But this data may be limited or difficult to deal with for individuals.
Another option is to rely on firms like Bloomberg and Morningstar. These companies aggregate all publicly available data, supplement it with privately held data, and make it available within systems and tools designed for research. While an excellent source of data, these systems and tools are typically expensive to access and reserved for financial institutions and professional users. Socrates, on the other hand, is a research system designed for users of all backgrounds and experience levels.
Access to credible data and purpose-built research systems and tools provides private entities with a competitive edge and is rarely free. Or if data is free, access is typically restricted. With this in mind, those looking for greater access to trusted market data and tools should be prepared to pay for it.
How to Find the Right Financial Data Provider
While membership or subscription-based systems are often purpose-built research tools that offer more insight compared to free alternatives, paying for this access needn't be prohibitively expensive. Many firms have democratized access to accurate data and research tools through tiered payment models. Assessing the value of each systems provider is key to finding the right solution for your needs.
When choosing a systems provider, signs of credibility include having an established market presence, breadth and depth of the data, and proprietary indicators or insights.
It is important to keep in mind that there is no single source of truth for market data or insights. Research takes time and effort, interpretations of data can vary, and financial investments involve risk of loss. Accuracy and success are never guaranteed. It is recommended to combine multiple sources, both free and paid, into your research. As an investor, this is an opportunity to roll up your sleeves, collate data, and generate better answers than you can find from any single provider.
At Socrates, we wholeheartedly believe that market trends repeat over time and that the global market is intricately connected. Movement in one market can have a ripple effect on others. As such it’s important to seek a long-term and holistic view of the market. Researching multiple reliable data sets and developing an understanding of market history will help you develop a better understanding of the market — placing you in a better position to make profitable investments. For more insights on smart investing, read our guide to finding and analyzing stock market data.
Access Trusted Market Research With Socrates
Originally designed for financial institutions and with decades of operation, Socrates is a platform purpose-built to enable you to research market activity on a global scale. Our proprietary models cover over 1,000+ markets and are used by everyone from amateur investors to leading institutions.
Wondering how Socrates can improve your research and analysis? Explore our membership plans to learn more.
For more insights on Socrates, read our guide comparing Socrates with competing market research services.