Social Media Stocks

The Facebook stock has been in the news a lot, lately, and not always for good reasons. Its price has been especially difficult to predict recently, even when it seems to be going in a very clear direction. It’s dropped over $5 in the past week, but before that, it spent the last six months making steady gains, a bit over $20 worth of profits. A lot of this is because of the fact that Facebook has said that its operational costs may increase by as much as 70 percent next year, and that spells trouble for the investors that are currently positioned long within the company.
Trade the Media Sites
As a matter of fact, the entire sector seems to be having some major difficulties. Even the giant company Google is struggling, and they are one of the largest of the social media companies, better positioned than almost any other social media stock out there. If Google is down almost $40 off of its high for the year, then there are big signs of trouble ahead for the entire sector. Twitter is another example of these issues. They are well above their low, but they are also far away from their high of over $73. Right now, at $41 and change, Twitter is down since their opening, and they keep plummeting, especially since they have announce that user interaction is down. It’s simply not as profitable for advertisers to put money here, and by extension, long term investors.

Since these stocks are not safe for long term investing right now, short term investing is the way to go if you must put your money here. Things like short sales and binary put options have become much more beneficial to traders than just the traditional buying and holding of stock. It allows you to profit off of these stocks regardless of what market conditions might look like. A short term approach lets you trade based upon readily available data and analysis, and it only keeps your money tied up for a small amount of time. If your trade does go bad, there’s no sitting around and waiting for it to get better. Instead, you can just wait for your trade to end automatically if you have a binary option, or just pull your money out and cut your losses. Yes, you will lose some money, but it allows you to reposition yourself in a better spot so that you can make money elsewhere. If done right, these short term losses will become long term gains over time.

The social media sector is pretty new, and like all new types of stocks, there will be many growing pains. The companies that can adapt will be profitable long term, and those that can’t will be absorbed or go bankrupt. That’s part of your job as a trader and investor. You need to figure out which companies have sustainable business models and which do not. Until you can find out something about a company that will support a long term decision, short term trading is perfect for using your knowledge to help you make some extra money in the markets. Just be aware that this is a very competitive industry right now, and it is getting harder and harder for these companies to make a consistent profit each day. But, with certain types of trading, you can profit regardless of the market direction. You just need to know which way the market will be going and act appropriately. If you do your research on your stocks of choice and get yourself in the right place to take advantage of things, making money over the short term is a good way to supplement long term profits.