How Crowdsourcing Could Help Your Family Make Better Investment Decisions

Crowdsourcing is a relatively new concept, emerging in the post-cloud era. It’s the idea that you can take
advantage of the ideas and money of the crowd to achieve better outcomes for whatever you’re trying to
do. Companies like Kickstarter most famously make use of the “crowd” for raising money to launch
companies and products, but it goes beyond that. Now researchers at the University of Alabama
Birmingham have found that you can use large groups of people for better financial analysis.

Currently, when most investors want to know the future earnings growth of a firm, they look to Wall Street
guidance. Analysts at the world-famous financial hub use models to crunch numbers and provide
investor clients with data on how much money they think the company in question will make. The more
money coming through the doors, the higher a company’s stock value.

Researchers, however, have found that when you crowdsource opinions on how much money a company
will actually make, you get more reliable answers. In other words, when you take advantage of the
knowledge of the herd, you get results that are closer to the truth. 

If you’re interested in this phenomenon, please take a look at the following infographic. It shows the latest
research into crowdsourcing and accounting, and how it is transforming the way investors evaluate stocks
. The infographic makes it easy to understand this tricky concept and provides all the intellectual tools you
need to make better investment decisions for your family. Check it out below. 

Infographic by University of Alabama Birmingham