Yahoo Finance Why is Reddit so Great for Research on Stocks?
We recently made a list of 15 Best Websites To Research Stocks. Reddit is one of them. While Reddit is not a finance platform, the threads it has on investing are extremely useful.
When it comes to building a strong portfolio, retail investors conduct a great deal of research to learn about the macroeconomic climate, read up on the most recent stock market trends, become familiar with investing strategies, and observe the most notable actions of smart investors and elite hedge funds. A sizable portion of the investing community consists of retail investors, and they have access to a wealth of online information that can assist them in navigating the volatile stock market. According to Gallup’s survey, 162 million Americans, or 62% of adults in the United States, own shares in public companies. That is a 1% rise over 2023 and the highest percentage observed by Gallup since 2008. During the Great Recession, stock ownership declined and remained low for more than a decade, reaching lows of 52% in 2013 and 2016. Before 2008, the majority of Gallup surveys revealed that at least 60% of American adults owned stocks.
Today, the stock market is very different from what existed at the time of the millennium. The internet has democratized information, resulting in increased stock market involvement, which has been accelerated during the pandemic. Wall Street welcomed retail investors for the first time as a result of the pandemic, even though the global outbreak is primarily remembered for the deadly virus and lockdowns. In a poll, 15% of American stock market participants stated they started investing in 2020. The study additionally shows that these new investors tended to be more optimistic about their prospects for success in the stock market. A study revealed that 19.5% of all stock market shares exchanged in the first half of 2020 were made by individual investors. That is about twice as many trades by ordinary investors as there were in 2010, and it represents an increase of 4.5% over 2019. This occurred during the meme stock mania in 2021, which saw prominent businesses skyrocketing on the stock market as retail investors banded together on social media and purchased the shares in bulk.
Notwithstanding the attraction of potential profits, new research from eToro indicates that many retail investors in the United States appear to be more afraid of losing money than they are of missing out on the next great opportunity. Rethinking Risk, research by eToro, finds that while 31% of US retail investors are driven by the fear of missing out on the next great thing, 61% of investors indicate that their investment strategy is shaped by the fear of losing money through immoderate risk. Their behaviors, however, reveal a different tale, as many retail investors continue to invest in risky assets, with 70% holding single stocks and 41% holding crypto assets in their portfolios. Additionally, this research shows that 62% of people who began investing in the markets now feel better about it.
Amidst these developments, the demand for easily available, reliable information to aid retail investors in their decision-making is rising. According to a survey conducted by BNY Mellon and the World Economic Forum on global retail investment, three-quarters of current retail investors said they would trade more actively if they had more opportunities to learn about investing along with personalized, goal-oriented stock guidance. Here's where trustworthy websites for stock research would come in very handy.
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Methodology:
For our list of the best websites to research stocks, we ranked them on the basis of consensus of several sources and reddit threads on the same topics. A website received one point everytime it appeared on a source, and we only selected websites that appeared at least thrice in our research. Furthermore, we also considered quantifiable factors in these websites that create substantial value for their audience and scored them additional points for that.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here)
One of the best websites for stock research is Reddit, which is an online forum. Investors typically discuss their latest trades, trending stocks, portfolio profits and losses, and macroeconomic conditions on Reddit, an online forum. WallStreetBets, a community of 12.5 million Redditors discussing their personal trade ideas and portfolio compositions, is Reddit's most popular investment thread. Subreddits like r/investing, r/stocks, r/biotech, and r/pennystocks are also crucial for stock research.
Redditors have a strong community and can easily push up prices and influence the stock market, which is why WallStreetBets has created several meme stocks over the years. GameStop Corp. (NYSE:GME) is one of the most popular meme stocks of 2024 on Reddit. The Texas-based company is a supplier of games and entertainment products. However, a surprising earnings announcement shows that GameStop Corp. (NYSE:GME)’s revenues continue to fall. First-quarter net sales were $0.882 billion, down from $1.237 billion in the same period last year. According to Reuters, the company has been losing money for several years due to its reliance on physical storefronts at a time when people buy video games and collectibles online, and the most recent quarter was no exception.
In Q1 FY 2024, 8 hedge funds reported holding shares in GameStop Corp. (NYSE:GME), down from 12 funds the previous quarter. The company's largest shareholder, Andrew Sandler's Sandler Capital Management, owned 3,452,000 shares, valued at more than $43.22 million in Q1.
Reddit ranks 4th on our list, but if you want to check out what other websites are and where they rank, visit the 15 Best Websites To Research Stocks. If you are looking for an AI stock that is more promising than GME but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. 15 Best Websites To Research Stocks is originally published on Insider Monkey. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
