Message boards provide a forum for users with similar interests to share their thoughts and specialized knowledge in various fields. Stock message boards contain tips and information on stocks. They have been around since investors began trading online. Today, they are very many and available on many platforms.
Stock message boards provide a platform for diverse and all-encompassing discussions. These discussions can be very beneficial to investors of any skill level. If you can analyze the information on them rationally, you can get some useful insights into market sentiment. On the other hand, the numerous conflicting opinions shared on the board can negatively influence your investment choices. Additionally, since message boards are hosted, maintained and updated by individuals, they are often a haven for scammers.
Stock message boards can be classified into three types:
General internet portals: These are message boards for casual participants. Their potential for spreading erroneous information and misleading tips makes them unpopular, and most have since been pushed aside by social media.
Specialized stock message boards: These are more advanced than the general internet portals and are hence more popular among the more advanced traders. Examples include Investors Hangout where you can find information on anything from individual stock prices to market trends.
Aggregators: Stock message board aggregators source information from many stock message boards and pool them in one place. This saves investors the trouble of hopping from one message board to another.
Analyzing message board information
Stock message boards feature many players from the technical analyst who always tries to look smart to the basher whose goal is to make the stock price drop. You need to be on the lookout for all the characters and their posts and avoid making rash decisions that are not based on facts.
Here are 4 things that you should look out for in a stock message board.
1. The credibility of a contributor
In the same way that historical data on stock charts predict the future of a stock, past posts of a contributor can be used to measure the credibility of a message board contributor. Before acting on anyone’s advice, check their credibility by comparing their past posts with the present results. If their past advice was wrong, you should not trust them.
2. Conspiracy theories
Sometimes, deals can be both good and true. If a stock is doing really well or very poorly, some people on the message boards are quick to formulate a conspiracy theory. They will go to great lengths to sell people on these theories. Your investment strategy should be based on cold hard facts not the word of conspiracy theorists.
3. Price predictions
The market dictates stock prices. Nobody has any real way of knowing how high or low the cost of a stock will go. Bullish message board contributors will always make price predictions. These predictions are unsubstantiated and should not be trusted.
4. Motive for posting
Message boards can influence peoples’ investment plans. This is why people use them to influence the trajectory of a share price. To bring a share price down, someone will launch a negative campaign against the company and vice versa. While reading through the messages on a stock message board, remember that everyone on it is trying to make money for themselves and that is their primary reason for posting.