Are Investors Influenced by Most Popular Finance Blogs?

Most Popular Financial blogs have become important sources of investment news, information, and insight. They all have common structural features that qualify them as a form of social media.

So whats makes blogs social?

There are two features that distinguish blogs from articles written by traditional print journalists. These features are what makes these blogs “social”.

The first distinguishing feature is that blog posts are appended with reader comments.

The second distinguishing feature is the inclusion of a social sharing and voting mechanism. At the end of most blog post, you will find familiar icons of leading social media websites. These icons, which are referred to as widgets, enable users to share blog post with or recommend them to, other with a mouse click. Some examples of social sharing and voting widgets include Facebook’s “Like” icon, LinkedIn “share” widget, Twitter’s “Tweet” button, and google’s “+1” icon. These sharing and voting functions are essential to the social nature of blogs.

The impact of financial blogs on investors

Recent investor survey findings suggest that most popular financial blogs are likely to play an increasingly important role in the decisions made by stock market participants. The Brunswick Group, a business communications and corporate relations firm, conducted a survey of the use of social media by professional investors in the United States, Europe, and Asia. According to the survey, 25-28 percent of responding investors in those jurisdictions had made an investment decision based on content they first encountered in a blog post. Seventy percent of the survey’s respondents indicated that they expect digital media to play a large role in their future investment decisions.

In my opinion, investors should be mindful to the fact that finance blogs do range from traditional business journalists to gossipy conspiracy theorists and any decision made by investors should be well analyzed and informed.