Not very long ago, financial decisions were made after sitting down with a professional advisor or discussing with your network of partners or investors.
The very idea of investing was more accessible to Wall Street and the corporate world since the average individual didn’t have the tools or knowledge needed to gather data. Now, things couldn’t be more different. Investing is no longer an activity reserved for wealthy CEOs and financial experts.
Thanks to the Internet, information is right there, ripe for the picking, and anyone with a bit of disposable income can learn to make wise decisions and grow their wealth. The average age at which people start investing has dropped significantly, with some making their first investments in their early 20s.
You don’t need a finance degree to invest wisely, nor do you need to be a professional trader. Online courses, forums, and blogs can help you get a solid foundation and teach you the basic investment concepts: risk, returns, diversification, interest, inflation, and so on. But once you know in theory how to invest, where can you get insights on the best investment opportunities? This is where social media comes in.
You already use social media to keep with friends, but platforms like Facebook, Twitter, and LinkedIn have massive potential for investors too. In fact, in the right hands, they can offer key perks, such as market insights, networking opportunities, and trend analysis.
Get market insights and anticipate trends.
Remember when you used to learn about company mergers, acquisitions, and finance reports from the news? Well, today, by the time you see it on TV, people on the web have been talking about it on social media for weeks.
Whenever something noteworthy happens, social networks are the first to buzz about it, so if you’re not tuning into it, you’re missing out. Whether it’s from official accounts such as Forbes, Bloomberg, or Business Insider, or from the personal accounts of affluent investors and finance experts, insights can help you build a solid investment strategy, stay up to date with trends, and even avoid risky moves.
LinkedIn is an especially useful social network for investors. Since it was designed for professionals, you get less random chatter and more competent information. One study showed that 73% of investors use LinkedIn to research investments, and two-thirds of high net worth investors visit LinkedIn more often than Facebook and Twitter.
What’s more, the social media effect extends to market sentiment too, and there are many examples of stocks that rose or dropped because of what people said about them on social media.
So, even if you don’t like or trust social media, you should still read your newsfeed every once in a while, at least to weigh and consider.
Meet other investors and grow your professional network
We all know that networking is crucial for any aspiring investor, and what better way to meet other investors and grow your professional social circle if not through social media?
Whether you want to find out about the most reliable investment companies, get professional advice, or just bounce off ideas, social networks couldn’t be more convenient. By default, LinkedIn is the best platform for professional networking since it has the highest concentration of finance experts, but you might want to invest in the premium version to get access to all its features.
LinkedIn Groups is especially useful because you can join a group that matches your experience and goals. For example, if you’re a beginner investor, you can join a group for beginners. If you want to invest in real estate, tech, or healthcare, there’s a group for that. Needless to say, social media is also the perfect place to learn about financing options, so if at some point, you want to start your own company, you won’t have to look very far.
If you find networks like Facebook, Twitter, and LinkedIn to be too general, you can also join social networks created especially for investors, such as AngelList, CrunchBase, and FS6.
Find your next mentor.
Although many affluent investors are self-thought, most of them got where they are today with help from a mentor. For Warren Buffet, that mentor was Ben Graham.
Many investors are actually mentoring themselves and take joy in sharing their life lessons with beginners. However, for people in most parts of the world, attending investing masterclasses and talking face-to-face with famous investors isn’t possible, but that doesn’t mean they don’t have options. Although it doesn’t offer mentoring in the traditional sense of the word, social media can be a great way to stay in touch with your investment inspiration and get valuable advice.
Most affluent investors share their insights and tips on Facebook and Twitter, and following them will give you your daily dose of information. Besides, many investors are more than happy to interact with their followers and help them when they have the time. So, if you have a dilemma that the books can’t answer, you can always ask it on Twitter and @ tag an investor you look up to. They might reply! Plus, many investors do AMAs on Reddit, so you might want to follow that too.
A word of caution
From staying in touch with friends to finding out about the latest market trends, social networks can be a fantastic tool. You can prepare for a potential recession, learn what the world’s most successful have to say about a company’s stocks, and find out about the hottest investment opportunity in Silicon Valley.
However, you should also know that there’s a lot of noise on social media, and one of the skills you’ll have to grow as an investor is tuning out all this noise and separating facts/legit advice from hype and clickbait.
Even professional finance publications have a tendency to post farfetched titles to drive clicks, and everyone with a laptop can write an “opinion piece.” So, feel free to read everything, but with an analytical eye. Don’t trust forecasts that aren’t backed up by data, and avoid taking panicked moves based on clickbait titles.
