Social Networking Hits Investing
28 November 2007 | Comments OffMore investors are meeting and sharing ideas in online trading communities. Should you base your portfolio moves on the wisdom of crowds?
For most equity investors, the wild market volatility of the past few weeks has been cause for gritted teeth and palpitating hearts. But a few who have become active in online trading communities took some solace in the fact that they at least had found a place where they can see how other investors are riding out the storm.
“Just the fact that I’m seeing people in there buying calls [an equity option that bets on rising prices] and common stock has definitely given me confidence that the individual is buying on the dip, which is basically what I do, and it’s always good to get some reassurance that other people are doing the same thing,” says Jim Collins, who opened an account at TradeKing.com in January.
Like many other parts of the Internet, online trading sites are more and more turning into collaborative experiences. Only one of the better-established discount online brokers, E*Trade Financial (ETFC), has made a foray into collaborative Web 2.0 capabilities with its acquisition of investment community Web site ClearStation in 1999, but a handful of newer brokers have made social networking a cornerstone of their platforms.




