Poll: How Useful Are Social Media Channels in Your Investment Decision-Making Process?
Investment analysis includes sophisticated financial analysis, the construction of cash-flow models, strategic and competitive analysis, and various forms of assessing management. However, forming our opinions of a security is only half the battle; the other half is understanding the market’s perception of the very same security — and how that perception is manifested in the security’s price.
Social media can be a tool for gauging the perceptions of others, be it the market’s receptivity to a company’s product or the feelings investors have about a particular stock or bond.
Nevertheless, when we asked CFA Institute Financial NewsBrief readers how important social media is to their investment decision-making process, the overwhelming majority rejected the idea that social media adds value. Of the 704 respondents, roughly 86% indicated that social media tools, such as Twitter, are not useful and are even counterproductive. Only 14% believe that social media tools are useful.
How useful are social media channels, such as Twitter, in your investment decision-making process?
Are these latter respondents in the vanguard of a new trend in investing? Perhaps learning how to use these new tools to their highest and best use — without getting sucked into time-wasting activities — might sway the masses. We will continue to explore this issue in future polls.
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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.