Finance Sites Booming And You Can Too (F, TM, GOOG, BIDU, GS)

During the past couple of weeks, finance sites are seeing drastic increases in traffic. It appears there a number of factors that are driving traffic to these sites at abnormally high levels. We spoke with executives at several finance sites, who said they are seeing record levels of traffic during the stock market rally.

Chip Brian from MySmarTrend said traffic to his site is "about 3-5% higher than usual for us, with earnings around the corner and it being the focus of our stories, we expect maybe a 10-20% jump in the next 2 weeks." Doug McIntyre, who runs 24/7 Wall Street, confirmed that his site is seeing a bump in traffic as well.

Some of the executives believe that traffic is being driven as a result of the incredible rally we have seen in the stock market since the March lows. It would appear as if this is driving interest in equities once again from retail investors, many of whom were burned badly during the financial crisis.

According to statistics that we have analyzed from Quantcast.com and Compete.com there has been a marked increase in visitors to sites like Reuters.com, WSJ.com and TheStreet.com. We at Benzinga.com have also seen a significant uptick in traffic.

Another likely catalyst is the onset of earnings season. If you are a savvy and informed stock investor, it is pretty much paramount that you follow your companies' earnings releases and corporate guidance announcements. One site proprietor that we talked to said that its domain sees about a 10%-20% jump in traffic during quarterly reporting season.

The blogosphere, in many ways, is changing the face of the financial markets. The ability of millions of investors to exchange ideas, analysis, and news in real time on the web has provided increased transparency and objectivity in the markets. The best part is that many of the sites that cater to independent minded retail investors are completely unaffiliated with the Wall Street sales machine.

With the advent of super low latency electronic trading, cheap commissions, massive liquidity and tight spreads, along with the incredible amount of market information that is transmitted in the blink of an eye over the internet, this really could be the golden age for the retail investor.

While it is true that institutional level investors have some advantages that individual investors do not have, such as highly paid research teams and sophisticated trading platforms, this does not mean that retail investors can't rack up returns which are similar to top ranked mutual and hedge funds.

The major advantage that retail investors have over these institutions is the relatively small size of their individual capital base and the flexibility that this allows them. An investor or trader who is maneuvering thousands of dollars in the market as opposed to billions, is at a huge advantage when it comes to flexibility, risk management, and speed.

Furthermore, many institutional level players are encumbered by restrictions governing how they invest their investor's funds. Small retail players have no such restrictions on how they allocate their capital. In this day and age, it is possible to take part in emerging investment opportunities across the globe in a myriad of different markets and asset classes, with the click of a mouse.

Is it easy to achieve success similar to a hedge fund? It most certainly is not easy, but many thousands are doing it year in and year out due to the rapid evolution of the financial markets. The most important factors in becoming successful at managing your money in the market is to find a profitable edge, emphasize risk management, and treat your trading and investing like a business onto itself.

If you do decide to take the plunge and become a more active participant in managing your money, sites such as Benzinga and a vast array of other independent financial blogs, can assist you in reaching your goals. There is an absolute treasure trove of ideas, research, and actionable news stories circulating on the web every single day. The key is to absorb as much of this information as possible, and then through trial and error, logic, deduction, and past experiences determine what is noise and what is actionable.

Two of the most recent trades that have been incredibly profitable, news driven, and just as available to retail investors as hedge funds are long/short positions in Ford (NYSE: F)/Toyota (NYSE: TM) and Baidu (NASDAQ: BIDU)/Google (NASDAQ: GOOG). If you compare the the three month charts of Ford and Toyota, you will see that in the wake of the Toyota recalls, TM has lost 12.16%, while their competitor Ford, has gained 18.62%. A long position in F while shorting TM, would have allowed for big profits while completely hedging out wider market risk.

The same phenomenon has been evidenced in the returns of GOOG and BIDU. The catalyst for this trade was the news that Google was pulling out of China. BIDU is the leading search engine in China. This news obviously benefitted BIDU and was a negative development for GOOG. The returns of these two securities over the last 3 months are evidence of this. Baidu shares have gained nearly 39% while Google's stock has risen just 2.64%. These are trades that many hedge funds were involved in, and savvy retail investors had the opportunity to do the same.

As long as the market is moving and negative stories like Goldman Sachs (NYSE: GS) today do not scare investors away, the upward traffic trends for finance sites should continue.