Money

How Social Media Tools Can Make You a Smarter Investor

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For all the clear benefits of social media in your daily life, chances are very good that you don’t leverage them effectively. You should become more conversant with social media, financial blogs, and other resources that combine to make online media serious investing tools.

[Related: How Investing Is Similar to Shoe Shopping]

Social media, which some see as founts of gossip and silly photos, are crucial sources of new investment information, according to Brian D. Egger, founder of BreakingCall.com and author of Social Media Strategies for Investing.

You don’t have to be a ‘Master of the Universe’ to know which social media tools can improve your research. Egger recommends:

Twitter. It lets you put the $ symbol in front of a company’s stock symbol to perform rapid financial research on a specific firm. Twitter lets you use filter tweets by selecting the accounts you want to follow, using the search capability on Twitter’s main screen. Twitter lets you filter tweets by typing the @ (at) symbol before a Twitter address. Select the “Follow” button to join that Twitter feed.

Financial blogs. They let you showcase comments with others and vote on or share articles or posts. Popular investment blogs include Zero Hedge, Seeking Alpha, Josh Brown’s Reformed Broker, Felix Salmon’s personal blog, and FelixSalmon.com. Seeking Alpha gives you access to professional traders’ opinions and research. It lets you subscribe to stock email alerts and an exchange-traded fund (ETF), or read transcripts of conference calls listed according to stock symbols.

About 60% of financial bloggers rely on Twitter as their sole media source.

Rich site summaries or really simple syndication (RSS). You can subscribe to your favorite websites by enrolling in them. You will need an RSS reader, but some are free, such as Feedreader. RSS lets you filter your material, alphabetize it, and aggregate information in one place.

Crowdsourcing sites. You can benefit from sites such as StockTwits, Estimize and Sum Zero. They let you know public opinion about any company and information that can drive share prices. StockTwits integrates investors’ posts on its Facebook, Twitter and LinkedIn pages.

Internet financial sites. Morningstar, Yahoo Finance, Google Finance, and Daily Finance let you track the performance of stocks and screen tools for trading and financial analysis. John Waggoner, an investment news columnist, likes Morningstar, especially for its data and market commentary. Specialized sites, such as Reddit, Digg or Delicious. They let you create bookmarks of your favorite destinations based on page ranking.

If you’re a serious investor you have no choice but to become social media savvy. You don’t want to fall too far behind. A caveat: “Social media has the attention span of a gnat,” Waggoner says.

“Most of the people that post with money-making tips are not thinking about investing for retirement. They’re thinking about next Wednesday.”