nottheaverageactuary

Actuarial news and views from Cape Town and beyond

The Social Media Age and Investment Markets

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AFP 538770041 A CIT USA NYIt is no secret that social media has taken the world by storm. One of the things social media has opened the world up to is instantaneous receipt and delivery of information. With a large number of people always checking their Facebook or Twitter timeline, social media is the easiest way to get information to people as well as get an idea of their preferences.

Social media’s reach even stretches into the investment world. In a report released in April by Greenwich Associates titled Institutional Investing in the Digital Age: How Social Media Informs and Shapes the Investing Process it was noted that “Almost 80% of institutional investors use social media as part of their regular work flow, and approximately 30% say the information consumed via social media has directly influenced an investment decision.”

This falls into the investors’ preferences category of the “Other influences on investment market” in Chapter 21, in particular social media alters investors’ preferences through investor education, marketing and may alter any sentiments of the investor.

With more institutions increasing their use of social media we could potentially see this as a section of the next version of the ActEd notes 🙂

The full article, with some other findings from the Greenwich Associates report can be found at:

http://americasmarkets.usatoday.com/2015/04/16/big-investors-says-social-media-influences-investment-picks/

Another article on this topic: http://www.ipe.com/news/asset-managers/social-media-influences-investment-decisions-shows-research/10007592.fullarticle

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