Article Categories
» Arts & Entertainment
» Automotive
» Business
» Careers & Jobs
» Education & Reference
» Finance
» Food & Drink
» Health & Fitness
» Home & Family
» Internet & Online Businesses
» Miscellaneous
» Self Improvement
» Shopping
» Society & News
» Sports & Recreation
» Technology
» Travel & Leisure
» Writing & Speaking

  Listed Article

  Category: Articles » Finance » Investing » Article
 

Can Stock Message Boards Make You Money?




By Christopher Smith

We've all done it. As part of our due diligence, we invariably find ourselves on the message boards found on Yahoo! Finance, or Stockhouse. While being an excellent source of entertainment, is there any real benefit to even visiting the bullboards?

The short answer is no.

The obvious reason why message boards provide little in the way of credible information is because everyone who posts a message has a bias, whether bullish or bearish. So you will end up with an overly optimistic picture of the company, or an overly bearish. Somewhere in the middle is the truth.

Its not difficult to spend hours reading through the posts, many of which are quite entertaining, however, offer little in the way of useful information. Any info that can be culled from a bullboard can typically be found on the company's investor relations pages.

Another reason why bullboards are quite ineffective for your portfolio is the same as the biggest problem that has faced every forum since its inception: invariably, the internet has provided everyone with a soapbox from which to preach from, and most times its garbage.

Just as you wouldnt ask a complete stranger advice on which car or house you should buy, you should be weary of who you get your investment advice from. Whats in it for them.

That said, message boards can provide an opportunity for a small group of likeminded investors to trade ideas. After reading through tens of thousands of pages in the last 8 years, I have only found about 5 people who's opinion I would trust my hard earned money with. It took years of following their posts to understand their methodology, and establish a track record of effective trades.

Here are some other tips:

1. Watch for someone who posts on only one message board. Most investors hold several positions at any one time. We've all done our due diligence and are well versed on a company. If someone is posting on only 1 board, they may be there for a reason other than the welfare of your portfolio.

2. Watch out for the poster who continues to be overly bullish or overly bearish on a stock. Dont confuse enthusiasm with bullishness. The posts will be obvious.

3. Watch out for someone who continues to post that news is coming. While even a broken clock tells the right time twice a day, if someone knows that news is coming out next week, that may be insider info, or, they may be hyping the stock. If you are in a good stock, it wont need to depend on good news to prop it up. Anticipation of good news normally keeps those on the fence from selling, and that is what a message board scammer is looking to do.

4. If you notice that someone has a short history as a member of that message board site and they begin to post that they know all about the company, it may be time to put them on ignore.

5. If you find that someone is posting under different identities, its also time to put them on ignore.

The only information that you can take as truth is the nickname the person has used. After that, you have to judge their posts and eventually, you will notice who can be trusted, and who cant be.
 
 
About the Author
Small Cap Investing - Find out how to make money investing in penny stocks. 1source4stocks.com can show you how.

Article Source: http://www.simplysearch4it.com/article/37552.html
 
If you wish to add the above article to your website or newsletters then please include the "Article Source: http://www.simplysearch4it.com/article/37552.html" as shown above and make it hyperlinked.



  Some other articles by Christopher Smith
How Do You React When Your Stocks Are Down
How do you react when you've found yourself in a losing position? Do you stick your head in the sand and hope that the stock price will rebound? Trading losses are a fact of ...

What You Don't Know About Micro Cap Stocks
Most investors think of the major stock exchanges when trading stocks comes to mind. The New York Stock Exchange (NYSE), the ...

Why Fall In Love With Your Stocks
Falling in love is easy, but breaking up is so hard to do. After spending hours pouring over numerous trading opportunities, you've found the perfect stock that meets your criteria and place ...

Penny Stock Winners - What To Do Next
When trading penny stocks, once you've had a big success, your first thought me be about cashing out in order to enjoy the fruits of your investment. Keep in mind however ...

How To Get An Advantage Trading Penny Stocks
Penny stocks represent the possibility of exceptional rewards for profit while offering equal opportunity for monumental risks. Once you make the decision to invest in penny stocks ...

Best Investment You'll Ever Make - And it costs you nothing
When you write for an investing site, you see them all the time. You hear from the subscribers who are looking ...

  
  Recent Articles
Making an offer on an Irish Property
by Clint Jhonson

How To Search California State Tax Lien Records
by Zach Parker

Buying a House at Auction is Very Good Investment
by Kotia Kot

The Future of Gaming is here, why the Video Game industry is reaching new highs.
by Jonel Cordero

All The Relevant Details About Remortgage Quotes Uk
by Turk Malloy

How Investment Property Helps You Retire Early
by Marian Rozwenc, PhD

How To Overcome The Hidden Perils Of Discount Online Stock Trading
by David Jenyns

Advantages of Long Term Investing and Compounding Interest
by Ohad Livne

When And When Not To Use A Stop
by Larry Potter

Passive Investing - How To Grow $250.00 to $250,000.00
by Gil Washington

Notary surety bonds preventing failure
by rick martin

Online Trading India - Investment at Kotak Securities!
by Tanya Lobo