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Basic Training Tips to Help Service Members Invest Wisely

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Identify and Report Investment Fraud Against Seniors

Spotlight on Initial Coin Offerings and Digital Assets

The SECs Office of Investor Education and Advocacy and the Financial Industry Regulatory Authority (FINRA) are issuing this Investor Bulletin to inform investors about social sentiment investing tools and highlight their risks. This Bulletin provides tips to consider before using tools that analyze or aggregate information from social media sources to make investment decisions or attempt to predict changes in the stock markets direction or in the price of a security.

Investors use a variety of sources to gather information to make investment decisions. These sources can includeanalyst estimates, news stories, various measures ofmarket volatility, andother tools. Recently, some investors have started using a new source of information to help make investment decisions social sentiment investing tools offered by financial services firms that seek to aggregate or analyze social media data from various sources (e.g., Twitter or Facebook).

Examples of social sentiment investing tools include:

. This type of social sentiment investing tool, offered by some financial services firms, uses natural language and other complex computer processing techniques to compile and analyze social media data including tweets, blog posts, and messages. These tools may claim to provide investors with indications of future market and economic performance along with, in some cases, positive/negative ratings of stocks and potential trading and investment strategies.

. Some financial services firms have their own social networks that offer users access to stock-specific social media sentiment information and allow users to share and discuss investment and trading ideas with other investors.

Direct trading from social media websites or mobile applications

. Some financial services firms offer investors the ability to trade in their brokerage accounts directly from social media platforms or mobile applications.

. Some firms have created crowdsourced social media research tools. These tools use a website or mobile application to crowdsource ideas and opinions from the public at large or from institutional investors. One emerging trend is to provide an open platform that allows contributors (such as analysts, investors and academics) to offer crowdsourced earnings estimates.

Potential Risks of Using Social Sentiment Investing Tools

Some investors may find value in using social sentiment investing tools to inform their investment decisions, but every investor should be aware that:

Information you get from social sentiment investing tools may be inaccurate, incomplete or misleading.

Stale social media data may impact the effectiveness of a social sentiment investing toolfor instance, the tool may contain old chatter and retweets, so the information provided by the tool might not be effective for its intended purpose.

Social media posts can have a hidden agenda. Posts can be used to spread false or misleading information to try to manipulate a stocks price (either positively or negatively), resulting in real consequences for companies, particularly small ormicro-cap companies, and investors who trade on this information.  For example, anSEC complaintcharged an individual who sent false tweets to influence stock prices in two companies, using Twitter accounts resembling well-known securities research firms.

Depending on how it is presented, social sentiment informationparticularly real-time discussion platforms and buy/sell indicators driven by social sentimentmay lead you to make emotionally-driven or impulsive investment decisions, which can be a risky way to approach investing.

If you decide to use social sentiment investing tools as part of your investment research, please remember the following tips:

DO NOT RELY SOLELY on social sentiment investing tools to make investment decisions. Carefully reviewpublicly disclosed company information, and consider reviewing other types of investment analysis, including fundamental value metrics.

Read all the disclosures, disclaimers, and background information provided by a social sentiment investing tool, including how the tool collects and analyzes social media data, and any risks or conflict of interests (for example, incentives from issuers or third-parties to promote a particular security).

Know yourtime horizonfor investing. Information from social sentiment investing tools is generally short-term in nature (i.e., it focuses on events that may have an immediate impact on investments).

Track the performance of any investment decisions made using social sentiment investment tools. If you use information from a social sentiment tool to make decisions about buying or selling individual stocks or funds, remember to monitor their investment performance against major market or sector indices.

Create and follow a long-term financial plan. Do not let short-term emotions about investments disrupt your long-term financial objectives.

To receive the latest Investor Alerts and other important investor information sign up forThe Alert Investornewsletter.

Call OIEA at 1-, ask a questionusing this online form, or email us .

VisitInvestor.gov, the SECs website for individual investors /investors, FINRAs website for individual investors.

Receive Investor Alerts and Bulletins from the Office of Investor Education and Advocacy (OIEA) byemailorRSS feed. Follow OIEA . Like OIEA onFacebookat /secinvestoreducation.

The Office of Investor Education and Advocacy has provided this information as a service to investors. It is neither a legal interpretation nor a statement of SEC policy. If you have questions concerning the meaning or application of a particular law or rule, please consult with an attorney who specializes in securities law.

The SECs Office of Investor Education and Advocacy and the Financial Industry Regulatory Authority (FINRA) are issuing this Investor Bulletin to inform investors about social sentiment investing tools and highlight their risks. This Bulletin provides tips to consider before using tools that analyze or aggregate information from social media sources to make investment decisions or attempt to predict changes in the stock markets direction or in the price of a security.

Investors use a variety of sources to gather information to make investment decisions. These sources can includeanalyst estimates, news stories, various measures ofmarket volatility, andother tools. Recently, some investors have started using a new source of information to help make investment decisions social sentiment investing tools offered by financial services firms that seek to aggregate or analyze social media data from various sources (e.g., Twitter or Facebook).

Examples of social sentiment investing tools include:

. This type of social sentiment investing tool, offered by some financial services firms, uses natural language and other complex computer processing techniques to compile and analyze social media data including tweets, blog posts, and messages. These tools may claim to provide investors with indications of future market and economic performance along with, in some cases, positive/negative ratings of stocks and potential trading and investment strategies.

. Some financial services firms have their own social networks that offer users access to stock-specific social media sentiment information and allow users to share and discuss investment and trading ideas with other investors.

Direct trading from social media websites or mobile applications

. Some financial services firms offer investors the ability to trade in their brokerage accounts directly from social media platforms or mobile applications.

. Some firms have created crowdsourced social media research tools. These tools use a website or mobile application to crowdsource ideas and opinions from the public at large or from institutional investors. One emerging trend is to provide an open platform that allows contributors (such as analysts, investors and academics) to offer crowdsourced earnings estimates.

Potential Risks of Using Social Sentiment Investing Tools

Some investors may find value in using social sentiment investing tools to inform their investment decisions, but every investor should be aware that:

Information you get from social sentiment investing tools may be inaccurate, incomplete or misleading.

Stale social media data may impact the effectiveness of a social sentiment investing toolfor instance, the tool may contain old chatter and retweets, so the information provided by the tool might not be effective for its intended purpose.

Social media posts can have a hidden agenda. Posts can be used to spread false or misleading information to try to manipulate a stocks price (either positively or negatively), resulting in real consequences for companies, particularly small ormicro-cap companies, and investors who trade on this information.  For example, anSEC complaintcharged an individual who sent false tweets to influence stock prices in two companies, using Twitter accounts resembling well-known securities research firms.

Depending on how it is presented, social sentiment informationparticularly real-time discussion platforms and buy/sell indicators driven by social sentimentmay lead you to make emotionally-driven or impulsive investment decisions, which can be a risky way to approach investing.

If you decide to use social sentiment investing tools as part of your investment research, please remember the following tips:

DO NOT RELY SOLELY on social sentiment investing tools to make investment decisions. Carefully reviewpublicly disclosed company information, and consider reviewing other types of investment analysis, including fundamental value metrics.

Read all the disclosures, disclaimers, and background information provided by a social sentiment investing tool, including how the tool collects and analyzes social media data, and any risks or conflict of interests (for example, incentives from issuers or third-parties to promote a particular security).

Know yourtime horizonfor investing. Information from social sentiment investing tools is generally short-term in nature (i.e., it focuses on events that may have an immediate impact on investments).

Track the performance of any investment decisions made using social sentiment investment tools. If you use information from a social sentiment tool to make decisions about buying or selling individual stocks or funds, remember to monitor their investment performance against major market or sector indices.

Create and follow a long-term financial plan. Do not let short-term emotions about investments disrupt your long-term financial objectives.

To receive the latest Investor Alerts and other important investor information sign up forThe Alert Investornewsletter.

Call OIEA at 1-, ask a questionusing this online form, or email us .

VisitInvestor.gov, the SECs website for individual investors andfinra.org/investors, FINRAs website for individual investors.

Receive Investor Alerts and Bulletins from the Office of Investor Education and Advocacy (OIEA) byemailorRSS feed. Follow OIEA . Like OIEA onFacebookat m/secinvestoreducation.

The Office of Investor Education and Advocacy has provided this information as a service to investors. It is neither a legal interpretation nor a statement of SEC policy. If you have questions concerning the meaning or application of a particular law or rule, please consult with an attorney who specializes in securities law.

The rapid growth of the Initial Coin Offering (ICO) market and digital assets presents individual investors with many questions. If you are considering an ICO or other investment opportunity involving digital assets, you may be wondering if it is legal, if it is right for you, or even whether it might be a scam. Here are some SEC resources to help you better understand these complex topics:

Investor Alert: Beware of Claims That the SEC Has Approved Offerings (April 2019)

Investor Alert: Watch Out for Fraudulent Digital Asset and Crypto Trading Websites (April 2019)

Investor Alert: Watch Out For False Claims About SEC And CFTC Endorsements Used To Promote Digital Asset Investments (Oct. 2018)

The SEC Has an Opportunity You Wont Want to Miss: Act Now! (May 2018)

Chairman Claytons Statement on Cryptocurrencies and Initial Coin Offerings (Dec. 2017)

Sample Questions for Investors Considering a Cryptocurrency or ICO Investment Opportunity (Dec. 2017)

Investor Alert: Celebrity Endorsements (Nov. 2017)

Investor Alert: Public Companies Making ICO-Related Claims (Aug. 2017)(This investor alert is also available in Spanish,Alerta al inversionista: Las empresas pblicas que hacen declaraciones relacionadas a las ICO.)

Investor Bulletin: Initial Coin Offerings (July 2017)(This investor bulletin is also available in Spanish,Boletn del inversionista: Oferta inicial de criptomonedas.)

Investor Alert: Bitcoin and Other Virtual Currency-Related Investments (May 2014)

Investor Alert: Ponzi Schemes Using Virtual Currencies (July 2013)

Investor Alert: Dont Invite Investment Scams to Find You (Sept. 2018)

Statement on NASAAs Announcement of Enforcement Sweep Targeting Fraudulent ICOs and Crypto-asset Investment Products (May 2018) Statement on Potentially Unlawful Online Platforms for Trading Digital Assets (Mar. 2018)

Chairmans Testimony on Virtual Currencies: The Roles of the SEC and CFTC (Feb. 2018)

Statement on Potentially Unlawful Promotion of Initial Coin Offerings and Other Investments by Celebrities and Others (Nov. 2017)

Use our online forms toask a questionorreport a problemconcerning your investments