Do Individual Investors Understand How Social Media Advice Influences Their Investment Decisions?

Do Individual Investors Understand How Social Media Advice Influences Their Investment Decisions?
Author: Kathryn Kadous
Publisher:
Total Pages: 51
Release: 2019
Genre:
ISBN:

Individual investors increasingly rely on investment advice from social media platforms. Even advice with little, if any, predictive value appears to influence investor decisions. Our study reports the results of two experiments that help explain why investors rely on such advice. We find that some investors rely on advice with low predictive value because they believe that the advice is informative. However, other investors who rely on the advice are unaware of its influence on their investment decisions. Specifically, we find that sentiment-only social media advice influences investment decisions even among investors who believe that the advice should not and does not affect their decisions. Further, we find that investors rely equally on advice that conveys only sentiment and advice that conveys information about firm fundamentals, despite these same investors indicating that they should and did rely more on fundamentals-related advice. Our research suggests that regulators' approach of asking investors to evaluate the credibility of the source is inadequate. To avoid being influenced by low quality information, investors need to avoid it entirely.

Clash of the Financial Pundits: How the Media Influences Your Investment Decisions for Better or Worse

Clash of the Financial Pundits: How the Media Influences Your Investment Decisions for Better or Worse
Author: Joshua M. Brown
Publisher: McGraw Hill Professional
Total Pages: 257
Release: 2014-05-23
Genre: Business & Economics
ISBN: 0071817905

HOW TO SEPARATE THE NEWS FROM THE NOISE: WHAT EVERY INVESTOR NEEDS TO KNOW There is no shortage of financial advice these days. From cocky cable pundits to nattering news columnists to off-grid online bloggers, there are more so-called experts than ever before--and the noise can be downright deafening. This no-bull, bottom-line guide from "The Reformed Broker" Josh Brown and Yahoo Finance's Jeff Macke will help you cut through the cacophony and make the most of today's media news. It's an eye-opening crash course in separating financial facts from fiction—featuring interviews with some of the world’s most influential investors, including: JIM CRAMER (Mad Money) takes you behind the scenes of his polarizing TV program--and talks about his clash with Jon Stewart on The Daily Show. HENRY BLODGET (Business Insider) shares anecdotes about tangling with Eliot Spitzer, covering the Martha Stewart trial, and launching his Business Insider site as a "marked man." BEN STEIN (Win Ben Stein's Money) reveals how he really feels about Bernanke, Bogle, Buffett, and bailouts. KAREN FINERMAN (CNBC's Fast Money) exposes the hype behind the headlines—and the "show biz" demands on television news pundits. HERB GREENBERG (TheStreet.com) explains why investors need to follow social media, where the "real" news is disseminated. BARRY RITHOLTZ (Bailout Nation) reveals his secret for "watching" financial TV. You'll also find invaluable insights from the original father of financial TV, Jim Rogers, and from James Altucher, the most shockingly honest commentator in the history of the medium. And you'll get a front-row seat for the processing and packaging of the news and learn everything you need to know about the talking heads who shape each day's narrative. Up-close. In-depth. All-true. Clash of the Financial Pundits is the one guide that will change the way you look at markets and investing forever. PRAISE FOR JOSH BROWN'S BACKSTAGE WALL STREET "Much like Michael Lewis's Liar's Poker captured the essence of 1980s institutional Wall Street, Brown's Backstage Wall Street re-creates the boiler room retail brokerage culture of the 1990s and early 2000s in vivid color." -- FORBES "Joshua Brown may be the funniest writer on finance today, but Backstage Wall Street could make you cry more than laugh. The buffoons, manipulators, and incompetents Brown parades before us are the stewards of our retirement accounts." -- BARRON'S "Run don't walk to read Brown's chronicles of deception [perpetrated by] those wonderful folks on Wall Street, who nearly bankrupted the world's financial system a few short years ago." -- DOUGLAS A. KASS, Seabreeze Partners Management, Inc.

Business Research Methods

Business Research Methods
Author: Alan Bryman
Publisher: Oxford University Press, USA
Total Pages: 822
Release: 2007
Genre: Business & Economics
ISBN: 0199284989

An adaptation of 'Social Research Methods' by Alan Bryman, this volume provides a comprehensive introduction to the area of business research methods. It gives students an assessment of the contexts within which different methods may be used and how they should be implemented.

Investing Psychology, + Website

Investing Psychology, + Website
Author: Tim Richards
Publisher: John Wiley & Sons
Total Pages: 256
Release: 2014-04-21
Genre: Business & Economics
ISBN: 1118722191

Discover how to remove behavioral bias from your investment decisions For many financial professionals and individual investors, behavioral bias is the largest single factor behind poor investment decisions. The same instincts that our brains employ to keep us alive all too often work against us in the world of finance and investments. Investing Psychology + Website explores several different types of behavioral bias, which pulls back the curtain on any illusions you have about yourself and your investing abilities. This practical investment guide explains that conventional financial wisdom is often nothing more than myth, and provides a detailed roadmap for overcoming behavioral bias. Offers an overview of how our brain perceives realities of the financial world at large and how human nature impacts even our most basic financial decisions Explores several different types of behavioral bias, which pulls back the curtain on any illusions you have about yourself and your investing abilities Provides real-world advice, including: Don't compete with institutions, always track your results, and don't trade when you're emotional, tired, or hungry Investing Psychology is a unique book that shows readers how to dig deeper and persistently question everything in the financial world around them, including the incorrect investment decisions that human nature all too often compels us to make.

Digital and Social Media Marketing

Digital and Social Media Marketing
Author: Nripendra P. Rana
Publisher: Springer Nature
Total Pages: 337
Release: 2019-11-11
Genre: Business & Economics
ISBN: 3030243745

This book examines issues and implications of digital and social media marketing for emerging markets. These markets necessitate substantial adaptations of developed theories and approaches employed in the Western world. The book investigates problems specific to emerging markets, while identifying new theoretical constructs and practical applications of digital marketing. It addresses topics such as electronic word of mouth (eWOM), demographic differences in digital marketing, mobile marketing, search engine advertising, among others. A radical increase in both temporal and geographical reach is empowering consumers to exert influence on brands, products, and services. Information and Communication Technologies (ICTs) and digital media are having a significant impact on the way people communicate and fulfil their socio-economic, emotional and material needs. These technologies are also being harnessed by businesses for various purposes including distribution and selling of goods, retailing of consumer services, customer relationship management, and influencing consumer behaviour by employing digital marketing practices. This book considers this, as it examines the practice and research related to digital and social media marketing.

Modern Influences on Retail Investor Behavior

Modern Influences on Retail Investor Behavior
Author: Jakob Kolbe
Publisher: GRIN Verlag
Total Pages: 32
Release: 2024-05-28
Genre: Business & Economics
ISBN: 3389027483

Seminar paper from the year 2023 in the subject Business economics - Investment and Finance, grade: 1,5, University of Frankfurt (Main) (Lehrstuhl für Personal Finance), course: Personal Finance, language: English, abstract: This paper examines the modern influences impacting retail investor behavior, concentrating on three primary areas: neo-brokers and payment for order flow (PFOF), social media platforms, and smartphones. The landscape for retail investors has evolved dramatically due to these factors. The paper begins by laying a theoretical foundation for understanding retail investor behavior, comparing rational investment models with the practical realities shaped by various biases. It delves into the role of neo-brokers, highlighting their innovative business models, user-friendly interfaces, and the implications of PFOF. The discussion addresses how these platforms alter investor engagement and decision-making processes. The influence of social media platforms, including Reddit's WallStreetBets, Twitter, and Seeking Alpha, is explored in depth. The paper considers the ways social media transforms information dissemination and interaction among retail investors, shaping their investment strategies and behaviors. Additionally, the paper investigates the impact of smartphones on trading habits, focusing on how mobile technology facilitates increased engagement and accessibility. It discusses the behavioral changes prompted by the convenience of mobile trading and the psychological and cognitive effects associated with it. In conclusion, the paper offers recommendations for regulatory and educational measures to address the challenges posed by these modern influences. It emphasizes the importance of promoting informed and rational investment decisions in the context of rapidly evolving technology and market practices.

Investment Insights

Investment Insights
Author: Sixolisiwe Dabula
Publisher: Independently Published
Total Pages: 0
Release: 2024-06-27
Genre: Business & Economics
ISBN:

Unlock the transformative potential of marketing in the world of investments with Investment Insights: Strategies for Smart Wealth Management. This comprehensive guide delves into the powerful intersection of marketing principles and investment strategies, offering actionable insights and practical advice for financial advisors, asset managers, and individual investors. Discover how marketing can enhance investment decisions, build strong investor relationships, and drive business growth. From understanding the psychology of investing to mastering market analysis techniques, this book provides a thorough exploration of the key concepts and strategies that bridge the gap between marketing and finance. Learn how to craft compelling value propositions, create impactful content, and utilize digital marketing techniques to reach and engage investors. Explore innovative trends such as FinTech, ESG investing, and the future of investment marketing. Through detailed case studies, gain valuable lessons from successful investment marketing campaigns and understand the best practices that top firms employ. Whether you're a seasoned financial professional or an individual investor looking to enhance your investment strategy, Investment Insights: Strategies for Smart Wealth Management equips you with the knowledge and tools to integrate marketing principles into your financial practices, ultimately achieving greater success and sustainable growth in the dynamic world of investments.

Investment Advice and Investor Action

Investment Advice and Investor Action
Author: Johan Graaf
Publisher:
Total Pages:
Release: 2019
Genre:
ISBN:

Social media has enabled retail investors to enter the market for information and both produce and consume information about investments. This study investigates how private investors' active involvement influences equity markets by following a high-profile Swedish court case whereby two students were found guilty of market manipulation after recommending shares through social media. The study utilizes the extensive court material to follow how social media advisers were able to produce the appearance of investment opportunities and, in doing so, the paper answers the research question of how investor action was achieved through the use of social media. The students' activities are theorized through Erving Goffman's theory of action, whereby investor action is conceptualized as a thrilling activity out of the ordinary. The paper contributes to the literature on financial markets by detailing how the students achieved their scheme by utilizing social media and the methods of advising which has been formed in these online communities. Furthermore, whereas previous research has emphasized advisers' rationalizing, legitimizing, and fact-making activities, this study shows how advisers also influence investors by creating excitement and boosting their confidence and hopes. Finally, the paper shows how these activities are combined and how rationalizing and incentivizing activities create conditions for one another.

The Psychology of Investing

The Psychology of Investing
Author: John R. Nofsinger
Publisher: Taylor & Francis
Total Pages: 236
Release: 2022-09-28
Genre: Business & Economics
ISBN: 1000652467

While traditional finance focuses on the tools used to optimize return and minimize risk, this book shows how psychology can explain our decisions more than financial theory. Analyzing how investors behave in the real world, this is the first book of its kind to delve into the ways biases influence investment behavior, and how overcoming these biases can increase financial success. Now in its seventh edition, this classic text features: An easy-to-understand structure, illustrating psychological biases as everyday behavior; analyzing their effect on investment decisions; and concluding with academic studies that show real-life investors making choices that hurt their wealth New content on fintech and cryptocurrencies, the role of social media in investing, generational biases, and the COVID-19 pandemic Experiential examples, chapter summaries, and end-of-chapter discussion questions to help readers test their practical understanding Online supplements comprising PowerPoint slides for both students and lecturers Fully updated with the latest research in the field, The Psychology of Investing will prove fascinating and educational for advanced students in behavioral finance, investment and portfolio management classes, as well as investors and financial planners.

Financial Risk Tolerance: A Psychometric Review

Financial Risk Tolerance: A Psychometric Review
Author: John E. Grable
Publisher: CFA Institute Research Foundation
Total Pages: 27
Release: 2017-06-30
Genre: Business & Economics
ISBN: 1944960201

This content provides financial analysts, investment professionals, and financial planners with a review of how financial risk-tolerance tests can and should be evaluated. It begins by clarifying terms related to risk taking and is followed by a broad overview of two important measurement terms: validity and reliability. It concludes with examples for practice.