According to a poll carried out by CFA Institute, investment analysis includes sophisticated financial analysis, the construction of cash-flow models, strategic and competitive analysis, and various forms of assessing management. However, forming our opinions of a security is only half the battle; the other half is understanding the market's perception of the very same security -- and how that perception is manifested in the security's price.
Social media can be a tool for gauging the perceptions of others, be it the market's receptivity to a company's product or the feelings investors have about a particular stock or bond. Nevertheless, the overwhelming majority of the respondents of the survey among NewsBrief readers rejected the idea that social media adds value when asked on how important social media was to their investment decision-making process. Of the 704 respondents, roughly 86% indicated that social media tools, such as Twitter, are not useful and are even counterproductive. Only 14% believe that social media tools are useful. Are these latter respondents on the vanguard of a new trend in investing? Perhaps learning how to use these new tools to their highest and best use -- without getting sucked into time-wasting activities -- might sway the masses.