New Media & the Financial Markets
From Baruchnewmedia
Introduction
New Media has contributed significantly to how people invest and follow the financial markets. Stock quotes, Stock tickers, up to the minute news alerts, and any other necessary resources for the market have become standard applications on phones, laptops, and other devices with internet capabilities. People eager to learn about how to trade or just understand the complex world of finance can also turn to Investopedia, a popular wiki for the financial world.
New Media has also contributed to the fluctuations of the markets themselves. There are many well know bloggers who constantly provide the world with their perspective on the market along with their predictions and many people listen and follow what some of these bloggers say.
Because of New Media technology, nearly every finance site has real time stock quotes. If you go to its market news page, the financial news will update automatically without refreshing the page.
If you go to Google finance, you will be able to track real time quotes on NASDAQ securities. This is an important tool for brokerage companies, in order to have timely and accurate data.
Financial Market Today
People who follow financial markers can access the website CNNMoney daily, to view the trading prices for stocks, bonds & currencies, and commodities. For example, as of November 27, 2011, we can see that the DOW has fell by .23%, Nasdaq fell by .75%, and S&P 500 fell by .27%. CNNMoney gives us all the latest news that relates to finance like the record sales for Black Friday that just passed, and the predictions for Cyber Monday.
Investopedia is also a helpful site that educates people on investing and finance. When accessing the site, you can see current financial news, articles, and personal financial assistance. You can find just about any information you need on the internet, all being updated by the second. All of these sites have applications that make it easier for people to keep up with the information while on the go.
The Role of New Media
This model has adopted economic relevance related to competition and regulatory authorities. It is used to enhance competition related to a popular sport, UEFA Champions League. It provided notification of an agreement with the provision of selling specific media rights of the matches in parallel to UEFA. The table shows that centralizing the sale of sport's media can show significant impact through the decrease of transaction costs. Those impacts include raising the entry barrier of the entrants and reducing the incentives to the investment in its platform. However, the real purpose of the table is to show that incentives of a different media production are difficult to grasp. It is hard to assess the content of the media because many are biased and irrelevant. It does not really matter if this sport is being centralized to decentralized, the economic strategies that are being used are the important key factors. The kind of arrangements that are strategical, is what most financial analyst look for. In all four scenarios, the opportunities of the incentives are limited and difficult to access especially the incumbent's dominant position. UEFA
Market Downturn
'Play Dead"
During a bear market, the bears rule - and the bulls don't stand a chance. There's an old saying that the best thing to do during a bear market is to play dead - it's the same protocol as if you met a real grizzly in the woods. Fighting back would be very dangerous. By staying calm and not making any sudden moves, you'll save yourself from becoming a bear's lunch. Playing dead in financial terms means putting a larger portion of your portfolio in money market securities such as certificates of deposit (CDs), U.S. Treasury bills, and other instruments with high liquidity and short maturities.
Invest Only What You Can Afford To Lose
Investing is important, but so is eating and keeping a roof over your head. It's unwise to take short-term funds (i.e. money for the mortgage or groceries) and invest them in stocks. As a general rule, investors should not get involved in equities unless they have an investment horizon of at least five years, but preferably more - and they should never invest money that they can't afford to lose. Remember, bear markets, or even minor corrections, can be extremely destructive.
New Media's Impact
New Media have also impacted the economic policy in two levels, known as elite opinion and popular opinion. The media carries the messages in both directions without the use of neutral act. Researchers have seen the media carrying the message out in a prominent, newsworthy process where even the slightest biases can be seen through the communication process. The media covers the economic matter with the reports and interpretation of news in short term involvement through macro-economy.
New Media is becoming the next new thing.
Since the media has their rights, they can exaggerate the importance of the volatility in financial prices and economic indicators. Volatility is defined as the relative rate in which the price moves up and down. Is is calculated by the annual standard deviation of daily change in price. For example, if the price of a product or stock moves up and down rapidly over a short period of time, it has high volatility. If it almost never change, it has low volatility.
Media workers for the most part are aware that they are being 'used' by the government and powerful sectional interests and are within limits. They see themselves as message carriers and that not all interest group have equal access to the media's broadcasting service . In order to have new media in the financial world, the messages or news given must be judged "newsworthy".
New Media Strategies
Thousands of companies are now using new media to increase their sales and popularity in large ways. New Media Strategies (NMS), which is the world's largest social media marketing agency, and Meredith 360, the marketing solutions client service group, have recently been awarded the Social Media Initiative award. This award was for the success of the skin care line, Eucerin's, national Skin First campaign which educates women about how proper skin care related to overall heath. The award was aimed to to celebrate the creative relationships between media companies, marketers and advertising agencies. It proves to us that social media is "more than skin deep." Throughout the campaign, the EucerinUS Facebook page went from 76 "likes" to over 100,000, and the amount of online conversation about Eucerin increased dramatically. Nowadays, nearly all brands are choosing to set up Facebook and Twitter accounts. They use it to announce new products, build large customer bases, and create a personal connection with their clientele. If a Twitter user decides to follow Nike on Twitter, they are constantly going to see the updates that Nike posts, and be reminded of the brand. Nike will ultimately serve as one of the users "friend." The exposure and popularity that brands get from new media is immense, and it helps to maximize sales and goodwill.
New Media in Employee Communication
Many companies all around the world report that they are expanding their horizons with the use of social media tools to maintain a connection with their employees and deliver information to them. More than two-thirds of companies that were surveyed by Towers Watson (NYSE, NASDAQ: TW), a global professional services company, said that they "plan to increase their use of social media tools over the next 12 months." The study also found that companies with successful communication programs also present with better communication skills in their leaders and managers.
New Media & Saving Opportunities
New Media provides a new way for all of us to save money nowadays. With sites such as Living Social, Groupon, Buy With Me, Scout Mob, and Google Offers, it has become a lot easier for people to enjoy life at a smaller cost. These sites have new offers everyday, including things such as restaurant deals, yoga classes, vacations, Botox/dental work, museum tickets, clothing discounts, and more. Many of the sites offer an option to post your purchase onto a social networking site, and if 3 of your friends buy the deal too, yours becomes free for you. This is a tremendous way for people to manage their finances and save a lot of money. These sites are growing with popularity and more and more people are using them. The stocks for these sites are increasing every day, and investors should definitely keep an eye on them.
New Media Aids in Financial Education
According to a recent report, The Financial Times now sees 20% of total page views and 15% of new trade subscriptions coming directly from mobile and tablet devices each week. These readers are also more engaged -- users who register on mobiles and tablets are 2.5 times more likely to subscribe, as well as being more active in giving feedback. This proves that new media is making it easier for people to read up on financial news and be aware of current situations. This is highly beneficial in today's economy. People need to stay aware of what's going on in order to protect their assets and make the right decisions.
The Future of Finance & New Media
In order to stay ahead in the field of finance nowadays, you need to be up to date with new media. Everything is being done through new media, and not getting familiar with new things will keep you behind. For example, for those who work with hedge funds should be familiar with Covestor. Covestor is like an eBay for investment services. Investors can go there, open an account, transfer money, and simply allocate those funds to new and old aspiring investment advisors. Just like you would go to a bank to find a mutual fund, Covestor provides that level of service for the investment advisory industry over the internet. These kinds of sites are arising every day, and they hold enormous opportunities for those who put them to use.
New Media and Financial Markets
Every aspect of our culture has been influenced by New Media, and Financial Markets are definitely not left out. People are able to get information regarding their stocks and investments right to their phone. In addition, news programs such as CNN have twitters where they tweet recent activities. Investopedia is just like Wikipedia, but only for financial information. Also, there are countless blogs that can be found about people’s interests in the financial markets, their predictions, and criticisms. All of these features are fairly new to our society and should not be taken for granted. New media has such a great effect on the way people access information and make decisions regarding financial markets.
Twitter is a form of new media in which users “tweet” whatever they wish to share with the people following them, as long as it is 140 characters. One might think that it seems useless, but its importance should not be slighted. Valuable information can be found on twitter, even about Financial Markets, at any given time of day. Just as an example, the twitter @Fin_Events is a twitter that strictly discusses events in the financial markets. @ Stock _Market is a twitter where people discuss whether to buy or sell stock. Of course, major news stations also cover financial markets, such as @CNN. Don’t forget this can all be accessed via your smart phone! People tweet about stocks, believe it or not. You can just throw out an idea about trading a stock and see what your followers think about it. People tweet about it enough that a site called StockTwits.com was formed. On this website, they collect all the tweets that have been made about stocks. For example, if someone tweets at the end $MSFT, they are tweeting about Microsoft stock. Based on the ticker of a stock, all information is gathered and put on this site.Stocktwits Then people can also comment and provide feedback. There have even been studies that show the positive and negative emotions on twitter can be correlated with the ups and downs of the stock market.Wired Science
Investopedia
Well known websites such as Investopedia, Yahoo Finance, etc are devoted to Financial Markets. Investopedia is a site that states its purpose is to educate on investing. They have a financial dictionary, which is helpful to people who are learning about finances or just stumble upon a word they do not know. They also provide stock analysis, tutorials, and a stock market simulator. A stock market simulator allows people to form a fake stock portfolio and invest with imaginary money and watch the results. This impacts greatly the way financial markets are run. These tools and technologies were not available before new media. The fact that you can research a stock and do an analysis on the company and history of the stock with little effort is amazing. It definitely has changed the way people trade. Investopedia
Blogs
As a class we were required to make our own personal blogs. There are countless blogs devoted to the Financial Markets. You can find them just about anywhere. Some people make their own personal blogs and may choose to blog about financial markets. There are also professional blogs that you can find on forbes.com or any other credible site. People can ask other investors their opinions and criticisms on the current status of the market to a specific stock. Information can be obtained and shared between investors that may be in different countries. For example, http://thewildinvestor.com/, is a blog that is split up into Stock Recommendations, Financial Markets, Chart School, Trader Lessons, and Trader Handbook. Its users can blog about their stock picks to the financial markets. They can also learn about the Stock Chart basics and tools. This is great for people who are not in the financial industry, but wish to invest money in the markets. They can use blogs like these to learn about different aspects of financial markets. Wild Investor
Much like blogs, people use Facebook to express themselves. Groups about Financial Marekts have been formed on Facebook, where people can write more informal thoughts on this topic. In addition, if a company has a twitter, the odds are that they have a Facebook as well. StockTwits also has a facebook where they are able to share links that they think are important, or discuss trending topics. There has been recent studies that indicate when people mention certain brands on Facebook, that their stock price is correlated with this. Although it is a fairly new study and not all facts are concrete. However, one can see that Facebook has been used as a marketing tool. Facebook holds much valuable information, and it could be seen how certain companies and their popularity on Facebook could be directly correlated to their success in the stockmarket Information Week
Sources
Gordon L. Clark, Nigel Thrift and Adam Tickell. Performing Finance: The Industry, the Media and Its Image. Review of International Political Economy. Vol. 11, No. 2 (May, 2004), pp. 289-310 Published by: Taylor & Francis, Ltd.
http://www.appappeal.com/app/stocktwits/
http://www.jstor.org/stable/4177499
http://finance.yahoo.com/news/More-Companies-Worldwide-bw-2125503140.html
http://finance.yahoo.com/news/New-Media-Strategies-and-prnews-1516659151.html?x=0&.v=1
http://www.prmediaconnection.com/
http://thewildinvestor.com/chart-school/
http://www.wired.com/wiredscience/2010/10/twitter-crystal-ball/
