My research paper is about the role of new media in the financial markets. Initially I was going to focus only on twitter and how it influences investors and traders, but as the semester went on, I decided to also cover other new media technologies, such as blogs, wikis and the new phenomenon of social investing.
I choose this topic because I’m interested in financial markets and their close relationship with technology. My research is based of scholarly papers, books and online newspaper articles.
In my paper I discuss how the financial industry has always been one of the early adopters of new technologies.What started as a bunch of guys standing and shouting at each other outdoors on the street in the 1790’s, is now a highly sophisticated industry fully dependant on technology and computing power. Financial markets have always been shaped by technology. When the telegraph was first introduced traders quickly adopted it and in 1867 the ticker tape was born, a little device that allowed the transmission of information from very long distances instantly.
Getting back to the present, new media has made a huge impact in the financial markets. I discuss how knowledge is being shared through blogging, wikis and online videos. There are many approaches to understanding the markets and the financial blogosphere is a good representation of such views. There are many blogs on fundamental analysis talking about financial statements and company performance, others discuss technical analysis and the behavior of a security’s price, and other blogs deal with the topic in a more quantitative and systematic approach. I also discuss how micro blogging, specially twitter, is a good platform from information sharing.
I explore social investing websites such as Covestor and Kaching, which allow average investors to mimic trades from more advanced investors. And also talk about how fully automated trading systems can be used by average investors who can subscribe to specific trading strategies through websites such as collective2.com and strategyrunner.com.
