How can we conduct research effectively?
A short case study from some of the ways I conduct my research.
In the past weeks, there have been questions surrounding how we could effectively and efficiently conduct our investment research. What I’m sharing can hopefully be applied in school, personally or in your career. I will be sharing three-pointers from my experience.
Firstly, before conducting any research, it is crucial to identify your whys. Identify the reason for conducting your research and why are you conducting them. During the research process, question the relevancy of the information, question the source/reporter/analyst, is it credible? Cross-reference from multiple sources to ensure reliability and ruling out biases (100% of it happening).
Secondly, filtering noises from the media. The media will report on anything that catches the public attention, their way of making a living. Denzel Washington mentioned, “If you don’t read the news, you are un-inform, yet if you read the news, you are misinformed.” Thus, knowing the importance to differentiate between news that informs vs ones to attract the crowd.
Lastly, the sources for consideration when collecting data. It is very significant to gather the data requirements from the origin. For example, to study a company, it is best to obtain the data from the source. However, reading from a third-party source helps us to identify loopholes. At the same time, it provides us with feedback and a different point-of-view regarding our field of research.
Case study: For example, on the recent inflation news, it is difficult to ignore the fact that it is a concern for many as it has a direct impact on our day to day lives. So yes, we are expecting it to rise given the stimulus and the demand + supply shock in the economy as compared to the same period last year. So, in terms of comparison wise, we are going to see a jump. However, there are deflationary forces present which is not reported extensively by the media, such as increased reliance on automation. Such news has minimal impact on my decision making, and I will share my reasoning in a moment.
Instead, I will be looking out for news on government actions, policies that are plan. News such as measurement to decrease unemployment, as well as increase efficiency. This kind of news will have a greater impact on the future rather than focusing on what has and will happen.
The news mentioned initially have their demands. They tend to cater to traders where such news tends to translate to volatility in the market. As for the information in the second part, it will have a greater weightage in my research given my longer investment horizon.
Summarizing my points, it is therefore critical to understand the direction and end goal of your research. You do not have to limit yourselves to the pointers mentioned above. There is more than one way to conduct any research and, the pointers mentioned are somewhat generalised. Hopefully, this helped you in some way and always happy to answer your questions.
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