Social media has become a powerful disruption to the advertising world, connecting consumers to businesses in new ways and often empowering consumers with a voice. Investing is not often thought of as a major aspect of the social media revolution, however a recent study by Marketwire suggests that 40% of financial professionals use social media as a source of credible information and that number jumps to 60% when professionals under 40 are surveyed.
Clearly, younger Web users view social media as a more credible source of information than their older colleagues. Combining a focus on social networks along with getting finance degrees online can put a young professional in the right spot to find tips and hints about company stock performances via social media. How should a young professional look to use social media to find their next big investment?
Here are 12 tips for using social media effectively to inform your investing strategy:
1. Follow your favorite brands on Facebook, Twitter, LinkedIn and elsewhere to find out the latest news about a company — the next stockholder meeting, growth strategies, IPO plans, etc. Since the SEC ruling on the use of social media, 80% of investors think more businesses will use social media to disseminate information with their followers.
2. Focus on an industry you are familiar with and follow them on Twitter or Facebook. Begin following small, medium and large companies to gauge their follower growth and engagement over a three month period of time. Use this information to better inform your strategy for investing with the right players in the vertical.
3. Once you’re following businesses in the industries you are most interested in, begin monitoring company mentions over time using a tool like HootSuite or Tweetdeck. Understanding the sentiment about a company is important. For example, if a business is getting more mentions one month over another and they’re all negative, then this may be a good indicator that the company is having trouble delivering its product or service. For the investor, it may be the time to trade the stock or begin investing in the competitors as result of the negative mentions.
4. Use LinkedIn and begin following industry leaders, investors and business experts for real time insights on the state of various verticals and the position these influencers are taking on the market.
5. Check trending hashtags on Twitter (and now Facebook) daily to see if any particular companies are gaining major traction across the web. Here are a few of the many financial hashtags to begin monitoring: #401k, #advisors, #financial, #investing, #equity, #bankruptcy, #taxes, #startups and #stocks.
6. Monitor your favorite companies’ stock symbols on Twitter, similar to how hashtags are used, for up to the minute news about stock valuations, insights on performance and overall market sentiment. For instance, check out the latest tweets about General Electric, Facebook, Netflix and American Express’s stock: $GE, $FB, $NFLX & $AXP.
7. Utilize social media sentiment tools like SocialMention, TweetFeel, Trackur and others to get a snapshot of what’s being said about particular brands, companies and investors’ insights in the marketplace. These tools can help you check the pulse of a certain business and help you understand what its closest customers and partners are saying online.
8. Follow prominent financial publishers on social media. Obvious choices are The Wall Street Journal, the New York Times, The Economist, The Guardian, Forbes, Fortune, Businessweek, CNN & many others.
9. Poll your friends! Millennials grew up with social media and are more comfortable asking friends what they like when it comes to a certain industry, brand or company. Asking a question like “what’s your favorite clothing brand right now?” might elicit solid feedback to give you leads for further research.
10. Be engaged. Don’t just follow all these tips above, staying on the sidelines. Retweet favorite investors’ content like videos, articles, e-books, case studies and white papers. By continually creating or driving relevant conversation about the businesses in an industry, you’ll make stronger connections with other investors, stay close to the pulse on the latest financial news and establish your voice as an expert on that topic.
11. Avoid being fooled by incorrect financial information and spam, which at times gains traction on social media. It’s important to research the source of every post, tweet, link or message you receive to protect yourself from making a hasty financial decision. Look out for content that seems too good to be true, that urges you to make a decision quickly and seems beyond risky.
12. Update the privacy settings on each of your social accounts to properly permit or deny access to your opinions and content on investing. The social media space is an excellent forum for discussing your investments, but at times these discussions should be kept within certain circles or specifically shared with the public. Double check your Facebook, Twitter and LinkedIn privacy settings before discussing your investment strategies.
What social media tips and tricks have helped bolster your investment strategy? Share your thoughts in the comments below!
Brian Honigman is the Digital Marketing Executive at Marc Ecko Enterprises. He is a part of Ecko’s marketing and e-commerce team, ensuring a polished brand experience across all channels. Follow him on Twitter @BrianHonigman.
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