15 Jan 2016 Why is Social Media important for traders and investors?
Sanlam iTrade Online is a leader in social media engagement on Twitter and Facebook, but why is that important for traders and investors?
Social media has taken the world by storm over the past decade. If Facebook was a country, it would have the biggest population in the world, surpassing China and India. In addition, every second, two new members join LinkedIn… every second.[i] With staggering usage statistics like this, it’s no wonder that it has become such an integral part of our lives and our businesses. South Africa has about 11 million active social media accounts, most of them on mobile devices as well.
Investment decisions starting more and more with social media.
But, is it important for investors? In The Brunswick Global Investor Survey 2015, it was uncovered that 77% of the investors in North America, Europe and Asia reported that they have investigated an issue based on information viewed on digital and social media and 41% say that they use digital media to launch the construction of an investment decision. In addition, blogs are most likely to be used both for investigating such issues and for constructing an investment decision.[ii]
“Social media is the closest humanity has come to creating a way to instantaneously monitor the pulse of the world and observe the stream of human consciousness.”[iii]
Speed of news discovery.
On top of the value of using social & digital media in investment decision making, social media is also the quickest access to breaking news and that is an important consideration for traders and investors. Often reporters in news conferences will tweet the actual content as the news breaks. It will take at least 30 minutes for the first report to appear on the Internet and much longer for the print media to respond.
If you did not happen to be watching SABC on the evening of the 9th of December you would only know much later about the hasty, unexpected sacking of our Finance Minister which sent the Rand and markets into a tailspin. Within minutes of the announcement Twitter was abuzz with the news of the immediate slide in the Rand in US markets; yes the Rand trades 24/7. Insights into the reasons and consequences emerged quickly as experts analyzed the events. Access to a data stream that can beat traditional media sources by over 20 minutes requires no explanation as to its value for traders and investors.
At Sanlam iTrade, we’ve been active in the social media playground for a while now and you can interact with us through a range of social media platforms. You can engage with us on Twitter, Facebook, Instagram, and LinkedIn and also keep up with our market insights on our blog. As an example, we warned about a correction on the JSE on 24 April 2015, the exact day of the all-time high.
We’re looking forward to catching up with you on social media and helping you on your JSE trading journey!
[i] Social Media Revolution 2015 – Eric Qualman. https://www.youtube.com/channel/UC6O8Xs6H5Jr-PkxybRjuo6Q
[ii] The Brunswick Global Investor Survey 2015 https://www.brunswickgroup.com/media/578617/2015-investor-digital-and-social-media-survey.pdf
[iii] Social Media And Markets: The New Frontier Gnip, Inc. www.gnip.com