Social Investing: The New Face of Retail Investment

Social media is slowly changing many business and personal relationship landscapes in this age. The total membership of the three giants (Facebook, Google+ and Twitter) put together is close to 2 billion. Facebook has more than a billion members. Google+ boasts of 360 million users at the beginning of May 2013. Twitter is also reported to have about 500 million subscribers. There might be substantial common subscribers. Still, even a billion strong force is a powerful force to reckon with.

On the other hand market trading and retail investment is a huge market. It covers currency trading, equities and commodity trading. Currency trading has now grown to USD 4.3 trillion daily. This is almost 12 times that of the daily equity market size. The commodity market is much smaller in size but growing rapidly. The top 10 commodity markets did a business of USD 1.3 trillion in 2012. These figures give us an idea that retail trading is a huge market with serious loss and gain issues. Being a mass market there are lot of wealth generated or lost and fortunes impacted in minutes. Experience and knowledge about market and market sentiments are the key assets to perform in this market. The real time information directly from market and the expert updates from analysts and traders are inputs that help retail customers take a stand.

The three biggest impacts of social media in our daily lives have been - news, interaction and learning. Social media has brought news to the masses. Tweets from news agencies, directly from the scene of an event, are important source of news. Sharing being a very easy activity on social media, news gets re-circulated fast in the network. Sharing and other features have made interpersonal interaction almost effortless. People who have basic learning and knowledge capturing skills can benefit immensely from social media. Sharing and social exchange are important criteria for knowledge transfer. This is specially true for tacit knowledge transfer. Tacit knowledge is basically experience oriented. Something that is vital to do well in financial trading markets. The huge availability of information, some real time, is an additional advantage. The surge of social media has suddenly made it possible for novice traders to tap into the knowledge capital of the more experienced traders. This kind of knowledge sharing among the investing community brings in an overall maturity of the market. This way the market in turn behaves lore responsibly.

World wide investment in equities, currency and commodity are growing rapidly. Social media has enabled and empowered ambitious retail customers to experiment and invest more in these markets.

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