Twitter's Effect on the Market

Markets Insight: Wake up to the #Twitter effect on markets

     This is an article I found that details how economists used a collection of data to view what happens to investors when they use social media tools like Twitter. Two students MIT in Boston, Sandy Pentland and Yaniv Altshuler, sought out to find the influence social media has on the market, and on investors in particular. They were able to track investment returns alongside information flows and found an interesting analysis. The students created a trading platform called eToro that monitored the trend among investors using social media to swap trader information. eToro allows traders to communicate and follow each other to discuss the market. The research found that traders who will alone in making decisions with hopes to find a big break in the market, did not compare to the returns received from those of eToro. They found that investors that were embedded into the social media outlet were able to gather information from broad and diverse channels. This goes to show how important the idea of communication is and how powerful Twitter can be. It is an outlet that provides information on all aspects of life. It helps users connect with one another for the bettering of the group. Selfishness is diminished in the social and real world when applications like this are applied everywhere.