Many knew it was only a matter of time, but it’s finally happened – the social mediafication of investing.
Several millennials along the West Coast are using unconventional methods that involve social media and apps to enter a market that 20-somethings have been afraid to do with lingering memories of the Great Recession.
The fact that social media is a tool this generation is well-versed in suggests the medium is here to stay.
Because social mediafication encourages novices to invest by learning together and sharing advice from investors of all skill levels, this will have a big impact on the investing sector, especially venture capitalism.
This method will certainly begin to spread throughout the country as its effectiveness begins to grow.
Through social media and technology apps, young investors are able to learn together by sharing tips, following other investors’ stock picks and informing each other of the latest trends in markets.
Young investors looking to invest their new wealth can find financial planners on these apps through recommendations from friends and followers.
One of these apps, Tip’d Off, has had a huge amount of success in the Bay Area. One user, Ankush Saxena, said because millennials have been more conservative than their predecessors, this app helped spur investing in Silicon Valley. He said this was primarily because the young investors felt “comfortable” using the app.
There are, however, some drawbacks to using such methods.
Some financial planners say because the markets can be volatile, investors should use caution making decisions based on activity from those they track.
Alan Moore, a certified financial planner, said opting in and out of stocks based on social trends can be costly.
Despite some of the warnings, evidence shows there is a growing demand among millennials to use such methods to invest in their future. With a recent survey showing younger Americans feel more confidence about their financial future than any other age group, this demand is only going to get stronger.