A report published by Finder, a personal finance comparison site, has revealed that half of investors in the UK are using social media to inform their investing decisions, with one in five relying solely on the medium.
The most popular social media platforms to get investing advice from, according to Finder’s report, are Youtube (21%) and Facebook (16%), followed by Instagram (15%), and Twitter (14%).
Furthermore, 12% of investors turn to TikTok, whilst 11% use Snapchat, and one in ten turn to Reddit for advice.
Finder pointed to younger age demographics driving this trend, with a reported 38% of 18- to 34-year-olds using social media for investing tips, compared to 6% of those aged 55 and over.
Indeed, Finder added that younger generations are the most prolific investors, with almost half (47%) owning at least one type of investment. This drops to 38% for 35 to 54-year-olds, and 27% of those ages 55 and above.
Other sources of information for amateur traders are investing news sites (26%), general news sites (24%) and a financial adviser (22%).
The use of social media to spread investing information is somewhat controversial. Makala Green, a chartered financial planner who founded Green Wealth Planning, is wary, and says the trend is a “boom waiting to bust”.
“Many invest purely for monetary gain with little knowledge of investing, leading to unknowingly taking on too much risk and potential losses,” Green warned.
Elvire Mavusi Matu, a social media content creator, on the other hand, believes these mediums are here to stay and encourage more conversations and research about trading.
Zoe Stabler, author of the report and investment writer at Finder, suggests that forums and social media should be used only to supplement research, not substitute it.
“While it’s always a positive to get young people interested in their personal finances, there’s the concern that the tips offered cross over the line between financial guidance and financial advice, which they often aren’t qualified to give, and don’t have experience in.”
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