How You Can Use Social Media To Look For Your Next Investment

Social media is a good place to look for the next thing you want to invest in. As news updates are almost immediate, you are able to get a good sense of what’s the next big thing in the market.

As technology advances, so do we. Linking social media with investing may seem like a bad idea, but it is an immense tool for those who are not emotional investors.

Professionals Keep A Close Eye

Twitter and other online communities are often the best sources of insight into the reasons behind breakout moves in stocks. Some companies and research organizations use social media websites to communicate business trends to investors.

These websites are often the first and best sources for providing better understanding of the consequences of policy decisions that influence the fate of firms. By using social media, investors may be able to learn of breaking news before they hit the mainstream media.

Traders Benefit

As an investor, you have to get past the perception that Twitter, Facebook, and YouTube are little more than just platforms for teenagers and young adults to broadcast their idle thoughts and complaints.

Some traders use a platform like Twitter to find out what the masses look out for in specific companies before committing to a trade. Also, traders can find out people’s reactions to news that have just been released. By being the first mover, they can be ahead of the competition in the market.

It is easy to look for news you want on a specific company. Some methods include typing in a particular news topic related to the firm in the search engine on Twitter and Facebook, or searching the company by its stock ticker symbol as a hashtag.

Other ways to search include:

• Geographical location

It narrows down the market you can explore such as Hong Kong, USA, and China. If there are good opportunities for businesses to thrive in the country, it could be a good time to start buying stocks from their respective stock exchange.

• Economic terms

Perhaps you should watch out for a price bubble.

• Sector

Keen on a specific industry? Maybe Tweets and Facebook posts online can reflect the market sentiment on the sector.

The best way for traders (and investors) to cope with the rapidly changing business environment is to become acquainted with some of the social media platforms that are available online.

Read Also: 3 Investment Strategies All Newbies Should Know About

How Long-term Investors Can Use It

In the short-term, the markets are mostly sentiment-driven. For long-term investing, it is good to avoid being an emotional investor because feelings can cloud your judgment on certain stocks. Nonetheless, investors can benefit from using social media sites. For example, even if you have already bought stocks in a company, it is good to keep tabs on them once in a while. As you are invested in them, isn’t it horrific to be one of the last to know of any damaging news? It is wise to stay up-to-date, but still, keep your emotions in check.

One way to ensure that you keep emotional investing at bay is to be confident that the company’s fundamentals are solid. This is done by analyzing their annual report, and checking key ratios from their financial statements.

If the news isn’t too damaging (such as a real scandal), but some unproven fear, the strong fundamentals of the company are likely to tide through the short-term price fall (if any) or volatility.

After Thought

Social media can be a platform to look out for potentially good investments. However, discretion must be exercised. If a post directly tells readers that investors should invest in a particular company, it is imperative to check the source and assess its credibility. Is the writer a professional fund manager, trader, economist, investment analyst, reporter, or a CEO? Social media alone cannot help you decide on whether to invest in a stock, but they can bring potential future high-performers to your attention.

Read Also: Understanding Investors Emotions to Make Better Investment Decisions

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