Advice is a tricky thing. You always want it but you also want to be sure if it is from a reputable source.
This is especially true when it comes to investing.
“Don’t put all your eggs in one basket” is so often heard that it’s almost a cliche. It’s also common sense.
What about the advice that isn’t heard so often–the hidden gems? You probably know already that’s what Seeking Alpha is for.
But smart investors are always hesitant to take advice from any platform without first checking its reputation.
The question: “Is Seeking Alpha reliable?” Read on for the answer.
For those of you who are unfamiliar with the platform, we’ll give you a rundown.
Seeking Alpha is a financial news and market analysis platform founded in 2004 that provides articles and research tools to help investors make informed investment decisions. In short, it is a stock research platform.
This allows those in the industry to get together and share their passion, knowledge, insights and stock analysis.
However, there is much debate in the investment community over whether Seeking Alpha is a reliable source of financial information–hence this article. We want to clear that up.
In short, the answer is yes. We’ll get into what we’re weary about below but let’s focus on what makes them reliable first.
Seeking Alpha calls itself the “largest community of investors in the world.” Whether this is true or not, it can’t be argued that Seeking Alpha has a vast collection of contributors, including both professional investors and individual investors.
This diversity helps to ensure that readers are exposed to a wide range of opinions and perspectives, including both bullish and bearish views of individual stocks, sectors or the market as a whole.
Seeking Alpha’s contributors have diverse backgrounds and expertise. And they are held to rigorous standards.
To become a contributor, one must pass a stringent screening process, including securities background checks and writing tests. Additionally, contributors must follow strict editorial guidelines that ensure the integrity and credibility of their work.
Seeking Alpha utilizes a multifaceted system of checks and balances that helps to safeguard the quality of the information presented on its platform.
This is done through a combination of automated and human manual review processes that check for numerous red flags, such as plagiarism, factual inaccuracies and financial conflicts of interest.
Seeking Alpha has a comprehensive disclaimer that outlines the risks involved in investing in the stock market. The platform is very open and encourages users to evaluate the information on Seeking Alpha cautiously–it doesn’t guarantee anything.
If you’re not convinced yet, this may help. Sought-after independent financial market analysis organizations like Morningstar, Barron’s and The Wall Street Journal have referenced Seeking Alpha articles, adding to the platform’s credibility.
Of course, anything that is read online can be entirely accurate or completely false. While we believe Seeking Alpha to be 100% reliable, there are some things we don’t like.
This is a double-edged sword–what’s positive about Seeking Alpha also hurts them.
Seeking Alpha’s model of accepting contributions from almost anyone who signs up can lead to a proliferation of low-quality content that lacks the rigor, analysis, perspective or soundness of research.
Due diligence from Seeking Alpha editors and research reports from contributors can be unreliable, incorrect, biased or incomprehensible, leading readers to invest in suboptimal or misleading situations accidentally.
Concerns have been raised that Seeking Alpha’s relatively lax editorial policies can make it easier for contributors with financial biases or motives to influence investors negatively.
Seeking Alpha is not a well-regulated investment advisory service and it’s essential to note that not all individuals who write articles for Seeking Alpha have the appropriate qualifications to provide investment advice. Therefore, some investors might find it hard to differentiate the potentially reliable research from that which offers no value.
Another issue that arises with Seeking Alpha is the possibility of fake news or clickbait headlines to lure readers to peer more into articles.
These sensationalistic headlines often attempt to create hype, which people are soon distracted by and chase somewhat desperate returns that cloud their good sense with a discombobulation of exaggerations, myths and outright lies.
We still believe it’s not strictly accurate to outright dismiss of Seeking Alpha. It is a sound platform that has a proven track record against the S&P 500.
Seeking Alpha does have its merits. But you must remember to do your due diligence–no matter what the platform is.
If you’re considering using Seeking Alpha you should know that they do have a few membership plans. Fortunately, you may be eligible for a Modest Money coupon.