With the help of social media, mobile apps, and open discussions about finance, the stock market has diversified.
Over the past few years, terms like personal finance and financial literacy have become buzzwords on social media. In addition to generating likes and views, these topics have made an impact beyond the virtual sphere. Recently, studies found that Black investors, especially young Black Americans, are the fastest-growing group of stock buyers.
Although social media has made investment information more digestible and accessible, investment influencers tend to promote riskier investment suggestions like meme stocks than financial advisers who typically recommend more traditional index funds for beginners, the WSJ reported.
Some investors, like sales representative Calah Beale, have lost money following social media’s suggestions, the WSJ reported. Meanwhile, others like college student Noah Reese told WSJ that they used a mix of trusted sources like Benjamin Graham’s “The Intelligent Investor” and YouTube videos by investment influencers.
“At the time, I thought I was making a good financial decision,” Beale told the WSJ, explaining how she lost $10,000 in savings when her meme stock investment dropped.
Ultimately, before making any investment decisions, remember to look at a variety of sources and experts.
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