Home Business NewsBusiness Social media and short-term: How young people are investing

Social media and short-term: How young people are investing

by LLB Editor
31st May 23 9:53 am

Investing is a complicated area, so it’s no wonder that lots of young investors are bamboozled by social media and end up taking too much risk.

Some of the FCA’s results are pretty worrying, with many investors thinking it’s a short-term get rich plan or taking far more risk than they should.

One of the golden rules with investing is to plan for the money to be invested for five years or more, so it’s worrying that the research shows only 2% of young investors plan to have the money invested for five years or longer.

Laura Suter, head of personal finance at AJBell, comments on the FCA’s research on young investors:

“Social media has a lot to answer for, with many people getting into investing for the first time because they hear about people making loads of money almost overnight. At best these are exaggerations and at worst they are scams. Lots of young people also use the likes of TikTok and Instagram to research investments, which can be a recipe for disaster. It means people will end up investing in far too risky assets or getting lured into scams and losing all their money.

“Despite many people creating glitz and glamour around investing, ultimately it should be pretty boring – particularly for first timers. If you’ve just made your first investment you shouldn’t be on a rollercoaster ride of making (and losing) money, instead you should buy one or two well-diversified funds that will steadily rise over time.

“First-timers who want to learn more about investing have a huge wealth of information available to them: a quick Google for ‘first time investor guide’ will give you lots of options – just make sure it’s from a reputable source. While chatting to friends and family about investing is also a great idea, make sure you don’t take their recommendations too literally and that you do your own due diligence before handing over your cash.”

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