From accounts payable to zombie banks, there’s an alphabet of financial terms you need to know to grow your money knowledge.
But charts and graphs make finance easy as 1,2,3.
Instead of reading a thousand words on the performance of the DOW Jones Industrial Average over the last hundred years, it’s far easier just to search the web for a breakout chart.
Because finance is simple if you ask one question – is the market up or down?
Everything else is detail.
Important detail. But with a graph or chart showing the big picture of any market or financial concept, you get instant insight.
If you want to understand finance, learn to love charts and graphs.
And the best thing is that your brain already does, even if you don’t think so yet.
Charts and graphs make understanding finance easier
If you go to a stockbroker’s office you might see stacks of densely written reports cluttering up the desks.
But the computers they are actually looking at will be showing nothing but charts and graphs. And not just because they are masters of the universe better schooled than we are in the arts of finance.
People of every stripe love and understand pictures, and have done since the dawn of time.
Pictures of woolly mammoths adorned the walls of caves long before writing came along. Humans are hardwired for visual representations of things, and charts and graphs are the ultimate form.
In fact, a 2017 study from Dartmouth University found that people were more easily persuaded by graphs of data compared to text on the same information.
The study showed that people tend to doubt written arguments because pre-existing beliefs they hold can make them resist the text’s message.
But those objections are bypassed or reshaped far more quickly if the same information is shown in a graph or chart.
So a written article saying your home’s energy use is too high will be questioned, but a chart showing your monthly power use is harder to argue with.
The takeaway here is that the best method to hack your way to financial knowledge is to concentrate on charts and graphs.
A picture really is worth a thousand words – and far quicker to act upon.
That’s why finance news that takes the time to show things visually instead of churning out wads of words is the best way to learn this game.
Charts and graphs make financial information simple
Every time you get behind the wheel of your car you experience the power of visual information.
The fuel tank’s status is shown with a bar graph that rises and falls as you fill up or drive. The speed and engine revs are shown with a needle pointing to numbers – pretty similar to many financial performance charts.
It’s accurate and efficient, and can be taken in at a glance while you drive.
In the same way, graphs and charts help to keep your eyes on the road for finance by giving you crucial information quickly.
In the old days, graphs and charts were static and simple.
In the digital age they’re constantly updated with new information so you can spot the latest trends and see the newest developments in real time.
This has given rise to the field of financial analytics, with businesses hiring data specialists so they can crunch the numbers harder, better and faster than the competition.
There’s research that suggests about 1.7 megabytes of new information every second will be soon be created for every person in the world.
People are looking for answers. And when it comes to the markets, you need to find a search engine of finance, one that explains what’s going on simply.
Look no further than charts and graphs, which show what’s going on in one go.
Data and trends are the gods of finance
Information is power. But only if it’s grasped.
In the digital age, information can be collected from every corner of the globe on just about anything imaginable.
Businesses rise and fall on their ability to simplify complex information into something they can use to base decisions on.
And graphs and charts are key weapons for doing this. Because just as everything comes to an end, everything comes to a trend.
A trend is defined as “the general direction in which something is developing or changing.”
In financial terms, trends are the analysis of gradual changes in process, output or conditions for a single company or an entire marketplace.
If you can spot a change in how things are being done or the outcome that’s being generated, there could be a business opportunity.
For example, a chart showing Facebook’s stock price falling could be compared with a chart showing a fall in global advertising spending.
Seeing as Facebook relies on adverts for its bottom line, comparing the two charts could indicate that Facebook may soon lower its prices for ads to rev up its revenue, and your business could prepare to take advantage of that.
By comparing and contrasting information, charts allow businesses to sift through a forest of trees to find an acorn they can grow.
Charts and graphs can do the same for your money knowledge, especially if you can find a financial information service that simplifies things as well as they do.
Charts show patterns within the complexity
The final piece of the financial puzzle that charts and graphs put into place is detecting patterns.
Where trends show the general direction of change, a pattern is a set of data that shows a recognisable form.
For example, a chart of shopping trends could show that overall consumer spending has been rising for a few years. But a pattern could also emerge from the chart showing what particular days people spend more money on.
These patterns can help businesses anticipate future events, shape their marketing strategies and even help investors forecast revenue.
Of course, no one can tell exactly what will happen in the future.
But the power of information harnessed through easy to understand charts and graphs gives investors and businesses the best crystal ball.
And if you can find an information service with the very latest charting and market intelligence, take a deep dive.
Because you can learn financial terms and concepts as you go. But with graphs and charts, the knowledge is right there in front of you.