The growth of the Internet and social-media tools, such as Facebook and Twitter, means advice is never hard to come by. However, the quality of that advice — and the adviser — should be researched thoroughly before making any financial decisions. Members of the Financial Planning Association of Greater Indiana may be able to advise you on this and other financial matters. Visit its Web site at http://www.fpagrindiana.org.
Charlotte Lippert, Bedel Financial Consulting
With regard to your investments, you should be very discerning about the advice you heed. This applies to the opinions you are exposed to at a holiday party, from the television, on the Internet, or through the use of Twitter.
The Internet can provide you with loads of data in mere seconds. With increased participation from trustworthy sources, it has become a great tool for obtaining quick and reasonably accurate information.
Now, social-media tools provide new avenues to reach out and be heard. However, most of what is out there is just “noise” and could be misleading.
For example, earlier this decade, stock message boards were intended to be a way to gain new insight about a company’s stock. In 1999 and 2000, they also provided the vehicle for a 15-year-old boy to commit securities fraud.
According to The New York Times, a teen named Jonathon Ledbed posted multiple recommendations for stocks with low trading volumes. When others bought the stocks based on his advice, he dumped his shares, netting at least a quarter of a million dollars in profit.
With regard to investing and advice, it is best to ask yourself the following questions: Is this information from a reputable source? Is the person or source providing the advice being paid by you? Do they have your best interests in mind? If the answers are “no,” then it’s likely not of great value to you.
Chad Stevens, Westpoint Financial Group
The world of information available to us today is astonishing.
We have investment advisers, business magazines, financial news sites, well-known Web sites, and now Twitter. This is the new thing.
Be forewarned, however, that just because a person goes by the name “Best Financial Planner in the World,” that does not mean it is true, nor does is mean that the person you are following or “tweeting” has the credentials or the licensing to give advice.
Whether online or in person, always ask if the person is licensed and has a professional designation, such as CFP, ChFC or CLU. Also, check their backgrounds. Check for years of experience and verify it via a company Web site.
One more caution: If the information you are getting is considered “insider trading,” which is nonpublic information that has been disseminated via an employee of the company, you could be subject to fines.
Twitter can be a good way to research a stock and get hints. If a tweeter is guiding you to other credible Web sites, it might be a good resource.
I would encourage you not to act solely on a “tweet” when picking your next investment. Meet with a financial adviser, who will learn about your specific situation and make recommendations.
The information provided is intended to be educational only and is not written or intended as specific tax or investment advice and may not be relied on for purposes of avoiding any federal tax penalties. MassMutual, its employees and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax counsel. Chad Stevens is a registered representative of MML Investors Services Inc., member SIPC.
Jeffrey B. Sturgis, Brightstone Advisors
There is a Latin phrase that comes to mind when discussions of the Internet and social media take place. It is caveat emptor, or “let the buyer beware.”
Those who seek investment advice from Twitter, Facebook and the Internet in general should keep this phrase in mind. Thanks to recent advances in technology, answers and advice are just a few mouse clicks away. Although access to abundant information is helpful, it is the quality of the information that still matters most.
The best advice and counsel is rarely generic in nature. Advice and counsel that takes into consideration your unique and specific set of circumstances will deliver the most value to you.
One size does not fit all when your money and investments are at stake. That is why the best advice and counsel will be found from a competent and experienced professional with an integral knowledge and understanding of you and your specific situation.
The chance of finding this kind of advice on Twitter, Facebook or the Internet is very unlikely, but, I suppose, not impossible.
If you are brave and can mitigate the risks that accompany social-media tools, it is not unreasonable to still expect any adviser to put your interests first — including advisers found on Twitter.
You should ask early on for their professional designations and the code of ethics they follow. If the vetting of their credentials discloses no reason for concern, there is no reason not to continue.
After all, centuries ago, Latin had a phrase for that, too — audaces fortuna iuvat — which means “fortune favors the bold.”