- Social media, including Twitter, have become go-to information platforms for elite investors, from hedge fund billionaire Ray Dalio to former PIMCO CEO Mohamed El-Erian.
- Personal financial planners are all over Twitter, too, and they say the investing education available for free can equal learning from a postgraduate degree.
Earlier this year (to be exact, March 21, 2019) Twitter officially became a teenager. Conceived as a way to share text messages with friends, Twitter has evolved into a global networking, information and marketing platform now valued by stock market investors at over $32 billion. But you don't need to be an owner of Twitter shares to generate investing value from its business.
The social media company has become a go-to forum for Wall Street's wisest, from banking elites to hedge fund billionaires and financial advisors, all of whom freely share their views on the markets and investing. If you actively manage your money in the market — or just want to increase your financial literacy — Twitter is a free resource to follow leading money minds, and even interact with them.
FinTwit, which stands for financial Twitter, is an online community that primarily uses the social network to discuss investing.
"We're sharing information and content that can actually be used to help make great decisions when it comes to your money," said Douglas Boneparth, president of New York City-based financial planning firm Bone Fide Wealth.
Boneparth suggests getting involved (not through a hashtag) by following some of Fintwit leaders.
CNBC's own Josh Brown, who has dubbed himself "The Chairman of the Twitter Federal Reserve" said in a magazine profile about the rise of Fintwit, "Where else can an average investor log onto a website and communicate directly with Mohamed El-Erian (chief economic adviser at Allianz)?" He also is a former CEO from bond investing giant PIMCO.
If you use a financial advisor, there's a chance they already are on Fintwit learning, too.
Michael Policar, a Washington State-based wealth manager with HighTower Bellevue, recently documented his experience being on FinTwit after a year and was astonished at the value of the back-and-forth banter.
"The information shared between members and then debated, seems like it would suffice for post-graduate education," Policar wrote in a LinkedIn post. It is not just the tweets: Policar credits FinTwit with guiding him to free access to numerous blogs, podcasts and newsletters that increase his knowledge and network.
After you've followed a few of FinTwit's leading voices consider going through their profile to see who they follow. Many of them follow parody accounts. These accounts may not offer personal finance advice, but will certainly offer entertaining and satirical takes on market activity.
Long-time investing columnist Jason Zweig, currently of The Wall Street Journal, recently summed it up by writing, "Twitter isn't just a megaphone for bragging about yourself and insulting your enemies, real or imagined. All investors should appreciate that some financial thinkers have turned the social-media site into a force for enlightenment and fun—if you follow the right people."
There is a great deal of FinTwit activity that may be over your head — or simply irrelevant to your investing portfolio and long-term goals. When investing billionaires like Carl Icahn take to Twitter as part of campaigns to argue their most recent stock trading positions, a do-it-yourself active investor may benefit, but long-term, diversified investors can probably tune it out.
Sometimes the heated Twitter arguments may be highly relevant. If you are saving for retirement using index funds and ETFs and trying your best to stay away from the daily noise about the markets, headlines like one earlier this week claiming the "real bubble" being in passive investing can seem unsettling. But FinTwit leaders like Josh Brown can help you learn how to think about, and dismantle, these arguments.
The advice does not need to be stock market specific. Ray Dalio, founder of the world's largest hedge fund, Bridgewater Associates, uses social media like Twitter and LinkedIn to channel the core lessons he has learned over a lifetime about success. "Over the years, I have found it invaluable to write down principles that guide my decision making and I want to help you with yours," Dalio wrote in a tweet last week.
Of course not all investing greats — even the ones on Twitter — are heavy users. Warren Buffett joined Twitter in 2013 and has more than 1.5 million followers, but a grand total of 9 tweets (that's 1.5 tweets per year for those 1.5 million followers), with his last coming in 2016.
Boneparth warns that it is up to the user to vet each account they follow. He suggests looking for links to advisor businesses and to follow with caution when following anonymous profiles. Focus following activity on fiduciaries – someone with a legal duty to put a client's interest first. Fiduciaries are associated with registered investment advisory firms, a designation you can find on a firm's website.
Using financial Twitter will not replace the advice you get from an individual advisor or information you attain through more detailed research. But it is a free — and often entertaining — way to learn about finance.
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.