Phoenix Bankruptcy Law News

Study Says Twitter Can Predict Stock Market

It can be easy to inquire a great deal of debt from a dip in the stock market. One bad trade and you may just suddenly find yourself on the phone with an Arizona bankruptcy lawyer asking about debt relief options.

Yet the Wall Street Journal reports that researchers at Indiana University are now using an unexpected tool to predict stock market trends. A study shows that the 140-character tweets on Twitter can actually predict stocks with 90 percent accuracy, up to four days in advance.

When the masses of online users tweet posts that indicate moods of calmness or anxiety, studies show that the market tends to fluctuate. Earlier this year, researchers at the University o Illinois conducted a similar study using the platform of LiveJournal, another social media website. This study showed that when a large portion of users tagged the emotion of anxiety with their post, there was a similar correlation with the performance of the Dow Jones Industrial Average

There are of course always random variables that are associated with stock market performance, so there are critics that say this method is unreliable and that it could be difficult to make money in the stock market by only relying on Twitter.

However, researcher Johan Bollen of Indiana University states that the results of his study are "pretty convincing" and that a great deal of money can be made from using this method. So if you're looking to make more money through stocks, it might be wise to check out the latest tweets.

Related Resources: