Buyer beware. And beware some more.
"This is the Wild West on top of another layer of the Wild West," said
The fast-and-loose nature of the Internet can combine with many Americans' nebulous knowledge about financial markets to produce a toxic investment cocktail, according to Lewer.
"You've got to be careful, because there are sharks out there wanting to take a bite out of you, and they'll use any method, including social media," he said.
That method has become more prevalent in recent years.
Various experiments have attempted to integrate social media and investing. A British hedge fund that used a
Last year, the founder of that fund,
"Today, social media creates a vast amount of information, and it has been proven that the sentiment derived from it can predict stock market movements." Hawtin told the Journal.
Rottier cited research that revealed the ability of
Documenting where people are regarding products and services can influence consumer purchasing decisions, according to Rottier. But it also can influence investment strategies.
"If I'm seeing all these terrible things in a day about Nike shoes, for example, on Twitter and I'm heading out to buy athletic shoes that day, I'm not feeling good about
Lewer believes social media can generate worthwhile investment information. But the volume, brevity and sometimes contradictory nature of
- Social media groups that pertain to investing should feature trusted and vetted individuals and sources, Lewer suggested. That can include friends as well as nationally known figures such as
"You have to be able to filter out good noise from bad noise," Lewer said. "You have to ask yourself, 'What is the motivation behind each of these pieces of information? Is it helpful to me, or is it helpful to someone else?'
"Who's looking out for you? That's the whole thing. ... It'll impact your wallet if you don't watch out."
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