Social media refers to user-generated content on the Internet, meaning the people who use a site are the ones posting the information. Most social media sites are free to encourage others to join. More users means more content, which in turn attracts even more users.
The Internet has become a place to share information with anyone who wants to read it. The financial sector was slow to adopt new on-line media outlets, but this has changed in recent years. Five years ago, the only social media outlets for investors were discussion forums—which could be hard to navigate and from which it was difficult to mine useful information—and a few blogs.
Blogs (personal on-line journals), discussion forums, message boards, investment communities and Twitter (center for short-message, real-time blogs) are among the types of social media outlets for investors.
Anyone can start a blog, create a Twitter account or join an investment community, so always keep in mind that postings tend to be other people’s opinions, not fact. Be sure to check the source of the information before putting any weight behind it. Decisions about investing should never be made because someone blogged about it.
Today there are thousands of options for interested investors to exchange investment advice, tips and experiences. Even brokerage firms have added community investment features to their offerings. Here, we highlight a few of the social media Web sites for investors that we find interesting and useful.
A wiki is a Web site employing special software that allows users to create and edit content. Wikinvest allows users to contribute articles and edit content related to investing. The site is free and includes over 10,000 articles on a variety of topics including individual companies, market trends and investment strategies.
The home page lets you search for topics by keyword or companies by name or ticker. The remainder of the site is primarily organized around investment concepts. Lists of the most popular concepts are found on any page of the site. Examples of concepts include: new home construction, natural gas prices, the impact of China and carbon trading. Each article presents neutral, bullish and bearish ideas on a concept and also includes a list of securities that may be positively or negatively affected by the topic. The major contributors to each article are listed.
To search for data on a specific company, you can enter a ticker symbol into the search box. Data includes a very detailed wiki analysis written by site contributors, a price and volume chart, current news on the company and a summary of financial statement data. The company analysis typically consists of a brief history, current market and company conditions, future prospects and competitive analysis. Source references are listed here as well.
Anyone can read the articles posted, but in order to contribute to the site you must register. As you post or make changes to the wiki, you earn contributor points. This allows users to gauge the usefulness and validity of your posts. Posts are also monitored.
Registration is free.
Covestor is a free site that follows the real trades of members. After you have registered, you can create your own profile, add your portfolio holdings and begin tracking trades. You can connect to some on-line brokers and import trades directly. You can also choose a benchmark against which you will be measured.
The Members area allows you to browse other Covestor member profiles, portfolios, performance and stock selections. It contains a Featured Investors section that highlights new Covestor members. You can also see the latest members making trades in the Latest Posts section and read a featured stock blogger. You can also see the member with the most recent trading activity.
The Stocks section allows you to browse by industry or by individual stock. You can also see the stocks most widely held by members and the stocks with the highest returns in each industry. You can type in an individual stock symbol and get a list of other members who hold that stock and other stocks available in the same sector.
The site is free.
Motley Fool’s CAPS is a community Web site that allows members to rate stocks based on their prediction of a stock’s performance relative to the S&P 500 over a specified time period. The site compiles the ratings and tracks an individual’s performance based on the accuracy of their predictions. Over time, players receive an accuracy percentage, called a CAPS rating, that is a percentile rank (from 1 to 100) indicating the percentage of players that the member is outperforming.
Stocks also receive ratings, which are aggregations of all player predictions for that stock, indicating whether or not players think the stock will outperform the S&P 500. Players with higher ratings have more influence on stock ratings. A CAPS screener allows users to screen for stocks with varying CAPS ratings as well as financial data elements.
Registration is free.
SocialPicks is a Web site for investors to share investment ideas, stock tips, analysis and more. Users first create a public profile with their stock picks, ideas and investing strategies. The home page provides a snapshot of newly updated areas of the site including recent stock picks, Twitter updates, top-performing member portfolios, blog entries and more.
The Picks area of the site displays recent member stock picks and includes explanations for each pick. Registered users can comment on picks. Picks are organized by stock sector (such as technology, energy, financial, healthcare, basic materials, and utilities). Each pick includes a link to learn more about the member making the pick, including the investor’s risk level and the overall performance of their stock picks.
The Investors area lists the top-performing members of all time and for the year to date, month to date, and current week. You can click on the member name for more detailed information about each member, including their outperformance rate (as compared to the entire membership base), all-time return, risk statistics, followers, and lists of current holdings and past stock picks.
Members can form new social groups with other users in the Groups area of the site or join an existing group. Groups may discuss investment strategies or offer portfolio competitions between members.
Finally, the site includes discussion boards for members. You can search by ticker symbol for a specific company mention or you can start your own discussion thread. You must register with the site to post, but you can browse posts and see member stock picks without registration.
Registration is free.
Stockpickr! is a stock idea sharing network for investors. The site’s home page provides links to the most popular areas of the Web site including blogs, member forums, and model portfolios.
To participate, you must register with the site. Registration is free and allows you to interact with other site members and create your own portfolio. Blogs and member forums are open to all members to discuss investment ideas or comment on market news and analysis.
Many members will find the wealth of model portfolios the most useful part of the site. Professional Portfolios include the holdings of many well-known investors such as David Dreman, and a number of funds from companies like Vanguard, Fidelity and Dodge & Cox. Portfolios are organized in order of the most recently updated. Data on each portfolio includes a description of the investments, performance data, comments and links to related discussions and analysis.
You can create your own portfolio and also view other members’ portfolios in the Do It Yourself Portfolios area. The site regularly features well-performing and popular portfolios of members.
Member forums allow registered investors to discuss trading strategies, stocks, general market news and more.
The site is free.
StockTwits uses Twitter to allow investors to comment on and discuss real-time market news, data and analysis. Anyone with a Twitter account can join for free (it is also free to create a Twitter account). You can search the site by company name or ticker symbol. Comments are displayed by the most recent first. The site also provides a candlestick chart for each company. The chart is only customizable based on frequency.
The site is free.