The numbers were brutal. In March 2009, the Dow Jones Industrial Average slid below 7,000 points for the first time since 1997. We had watched the market lose over half its value since that October 2007 peak. That is a drop of 7,200 points. It wasn’t just a correction. It was a collapse of confidence.
Wall Street’s biggest names were crumbling. Merrill Lynch and Goldman Sachs were stumbling. When the giants fall, regular people stop trusting the impersonal brokerage houses. They look for alternatives. They look for each other.
This is where Investor Village steps into the void.
It isn’t a trading platform in the traditional sense. It’s a social network for investing. Since the market started its downward spiral in 2007, subscriptions to these kinds of communities have spiked. The premise is straightforward. Why rely on a single analyst’s report when you can tap into the collective intelligence of thousands of amateur researchers and individual investors?
“To build an online community where individual investors and amateur market researchers can share their collective knowledge and offer advice.”
Investor Village has been around since late 2003. It started under the name “BuyB4theRush” as a private stock discussion group. It earned a name for itself quickly. Users there are known for being smarter than average. The discourse tends to be civil, at least compared to the rabid anger found on many other financial forums.
Today, it remains primarily a message board hub. There are over 16,000 active boards. Hundreds of member-run groups pull in tens of thousands of subscribers. But is it safe? Is it worth the cost?
How Does Investor Village Work?
First, the bad news. It is not free.
Unlike many social media sites where your attention is the currency, Investor Village demands cash. As of June 2009, you need a paid account to view individual threads or post responses. The cost was $8.99 a month. A full year subscription ran $71.88. If you wanted to test the waters without diving in headfirst, they offered a seven-day trial.
Once you pay, you pick an alias. This is your username. It is the only way you will be known on the site.
You are encouraged to fill out a profile. Age. Sex. Location. Education. Occupation. Favorite stocks. This data helps others gauge your credibility. However, there is no field for your legal name. Anonymity is the norm. Most members keep their real identities hidden.
The site is split into three distinct zones:
- Message Boards
- Groups
- MyIV
Clicking “Message Board” takes you to the directory. Each board is named after a publicly traded company. They are listed by name and ticker symbol. You can search by company, ticker, or keyword.
Below the search bar, you will see the top five most active boards across eight categories. We are talking large-cap stocks. Mid-cap. Small-cap. Community boards. And Investor Village Groups.
The Difference Between Boards and Groups
Groups look like message boards. They behave like message boards. But the rules are different.
Any member can start a group. The topic doesn’t have to be a single stock. It can be about a sector, a strategy, or even a hobby. Participation is restricted to members of that specific group. You have to apply to join. Some groups are open to anyone. Others are exclusive clubs with strict vetting processes.
MyIV: Your Personal Command Center
MyIV is where you manage your experience. It functions as your inbox for private messages. It is Investor Village’s internal messaging system.
Here, you can save threads you care about. You can build a list of favorite members whose opinions you trust. You can share your investment portfolio with the community. You can also tweak your notification preferences.
Want to be emailed every time someone replies to your post? Done. Want to know when a member sends you a private message? Easy.
At that time, the blog section was still in development. It wasn’t fully live. But the core functionality—the ability to track, discuss, and share—was robust.
Is It Safe?
This is the question everyone asks. How exactly do you use Investor Village? More importantly, is it safe to make a trade based on advice you read on one of the site’s message boards?
The platform itself is secure. Your payment information is handled. Your identity is protected by your alias. But the advice? That is a different story.
We will dig deeper into the security and safety aspects next. Because knowing how to navigate the site is one thing. Knowing whether you can trust the strangers posting in it is another.
The Real Risk: Misleading Advice, Not Just Hacks
Security at social networking sites like Investor Village isn’t primarily about hackers stealing your password or data breaches exposing your social security number. The actual danger lies elsewhere. It’s about being swindled by inept or purposefully misleading financial advice.
When you register for Investor Village security risks, you aren’t just clicking “I agree.” You are signing a user agreement that strips the platform of liability. The owners and administrators explicitly state they do not verify or endorse any opinions posted. They take zero responsibility for the accuracy of content provided by thousands of members.
The platform is blunt about who its users are. The agreement notes that many members are “do-it-administrators” retail investors and/or traders. They often have little or no training, education, experience, or specialized knowledge of markets. Consequently, investors are told to treat all advice with “discretion and skepticism.” Independent verification is mandatory before acting on any tip that could lead to financial ruin.
The Small Cap Trap
The user agreement calls special attention to small cap stocks. These are companies generally worth $2 billion or less. They are highly susceptible to price manipulations.
The most common scheme is the “pump and dump” operation. Here is how it works: a group of self-proclaimed “experts” or “insiders” spread news that a hot new stock is going to skyrocket. As other people buy in, the price rises. This creates a false air of credibility.
The bubble always bursts. Often, the stock is just a shell of a real company. When everyone sells like mad, the price crashes. The perpetrators know this is coming. They “dump” or sell their stocks at the inflated price before the collapse.
Self-Policing vs. Active Moderation
Investor Village does not routinely scan message boards for illegal or abusive activity. Instead, it relies on a self-regulating system. Users flag messages that appear to break the user agreement. Administrators investigate claims of abuse and take appropriate action, but they do not proactively hunt for every violation.
If you are a cautious investor, there are advantages. The next section covers the benefits.
Benefits of Investor Village
The primary advantage of joining an investment social network like Investor Village benefits is the access to collective wisdom. Members are serious about investing. They are not all experts, but they actively identify emerging markets and pinpoint stocks with growth potential.
Because Investor Village requires paying members, it is not a popular target for spammers, phishers, scammers, or flamers. The demographics reflect this exclusivity. According to Quantcast, 87 percent of members are male. 85 percent are 35 years or older. 62 percent make more than $100,000 a year. A core 45 percent of members drive 91 percent of the traffic.
Who benefits most? Someone who already spends significant time researching companies and studying market trends for personal investments. For this person, the site provides an excellent sounding board for new strategies.
Other members can introduce you to stock picks you would never have considered. You might post about an underexplored sector like mining companies. Another member might recommend specific firms they have followed for years. You gain a head start on your own research.
Ultimately, the site offers community and camaraderie. Investors share excitement about beating the system. They find small niches in the market that are still growing and score big, especially during unprecedented global financial crises.
For more on investing and stock markets, refer to related articles on niche social networks and what makes social sites addictive or productive.
Sources:
– Bogoslaw, David. BusinessWeek. “Social Networking Hits Investing.” August 21, 2007
– Investor Village. “User Agreement”
– Quantcast. “Investor Village”
– Shell, Adam. USA Today. “Stocks fall to lowest level since 1997…” March 2, 2009
– U.S. Securities and Exchange Commission. “Pump and Dump Schemes”
