Wall Street Beware: Top 7 Social Networks for Investors

by Ryon Harms on December 7, 2009

People find online social networks rewarding in different ways. The rewards are usually non-monetary, like keeping up with friends on Facebook, or the satisfaction of writing an authoritative article on Wikipedia. Introducing market norms (aka: you try to overtly pitch yourself to make money) to these socially driven communities is the shortest path to losing friends and alienating people. However, when the very reason for the community’s existence is to help everyone get rich, you experience an entirely new digital anthropology.

Nowhere is the spirit of wealth building stronger than on social networks for stock traders. The public nature of investing in the stock market makes social media a particularly powerful medium for exchanging ideas and advice, as well as for building your reputation as a world-class investor. But you don’t need to be a rock star day trader or bonus-hungry institutional analyst to benefit from these networks. All you need is a willingness to listen and a desire to take control of your investment decisions.

Gone are the days when you had to rely solely on fee-laden stock brokers and mutual funds. I don’t need to recount how Wall Street nearly sank the ship last fall, but the point is that through social media you have unprecedented opportunities to see inside the minds of some of today’s most talented investors. Not to mention that many of the top traders on the social networks listed below are actually professionals giving away comparable advice that might otherwise cost us handsomely.

I’ve chosen the top seven free social networks for investors below based on my experiences and because each represents a slightly different approach to community investing.

Top 7 Social Networks for Investors

SeekingAlpha

SeekingAlpha’s blog community is arguably the most influential group of investors on the Web. Nielsen recently confirmed that the site’s audience has more $500K+ portfolios, the most active traders and the largest percentage of finance professionals among stock market finance sites. If there is one finance site you follow, make it SeekingAlpha.

StockTwits — “The Human Ticker.”

StockTwits is an open, community-powered idea and information service for investments that is supported by the Twitter API. Users can eavesdrop on traders and investors, or contribute to the conversation and build their reputation as savvy market wizards. Since StockTwits piggybacks on Twitter, it is an especially powerful tool for consuming real-time information on the market and on specific stocks.

Covestor — “Follow investors that have proven their worth.”

With Covestor, you can coattail the world’s best investors: see what stocks other members are investing in and why. Find ideas from others doing the hard work and putting their own money where their mouths are. If you had to choose one investor social network to join I would recommend Covestor.

Motley Fool CAPS – “Investors helping investors beat the market.”

Outperform … or underperform? The Fool’s unique stock-rating service provides insights into what Motley Fool community members (as well as more than 100 professional Wall Street firms) think about the stocks investors own. More than 5,000 stocks – and the thousands of investors who cover them – carry a rating from one to five stars.

Stockpickr — “The stock idea network.”

Stockpickr Network provides members with windows into the stock picks of other community members as well as professional investors, sparking discussion via idea-sharing forums and products. It also updates the portfolios of selected professional investors, including Warren Buffett and George Soros. You can easily browse these portfolios and drill down on stocks that interest you.

Wikinvest — “Investing simplified.”

Wikinvest is Wikipedia for investors. It offer insightful community written wikis that aim to give investors the context they need to understand what they are betting on when they purchase a particular stock or invest in a specific sector. Unlike traditional data-driven finance, Wikinvest articles boil down the important nuggets about a company. Through WikiCharts, it also offers stock performance charts that contain user-generated annotations.

The Investor Network “Where real investors connect”

Run by the brokerage services powerhouse, Broadridge, The Investor Network is unique in that it validates each member as a “real” investor at an actual public company. They believe this allows community members to share ideas and information without having to weed through the noise on other investment-oriented sites.

Will free social networks one day replace high-priced Wall Street pros? Ask community investors and some will tell you that the pressure on sell-side analysts has already begun. I’m betting that the wisdom of crowds will continue to produce too much valuable information for any single organization, or street for that matter, to keep pace.

Update: SeekingAlpha and StockTwits recently announced a $7 million and $3 million, respectively, round of financing. Also, in addition to integration into Yahoo Finance, SeekingAlpha has been added to NASDAQ’s official website (example).

{ 2 comments… read them below or add one }

TheSocialExec December 10, 2009 at 1:13 am

What makes you say that. What is it about SA that takes it to the top and Motley Fool at the bottom. Does it have to do with your preferences as an investor?

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Old Trader December 10, 2009 at 1:24 am

As you point out, the caliber of the people seems appreciably higher (meaning more people actually working in the financial field, private investors running larger portfolios willing to do the "home work" to do so successfully, etc.).

From what I've seen of the Fool site, it seems to be just barely above some of the yahoo finance chat boards that I've run across. Naturally, there are exceptions to both amongst the members of both sites.

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