Study: Using social media for investing raises confidence without raising real knowledge

# What the study measured

The surveys also asked whether people relied on social media groups or message boards and whether they used platforms such as YouTube, Facebook, Reddit, and TikTok to learn about investing. Respondents were asked whether they had purchased meme stocks or heard of cryptocurrencies.

# Main findings

Users who relied on social media reported higher confidence in their investment knowledge. Objective test results did not back up that confidence. People who used traditional media (newspapers, magazines, TV, radio) showed alignment between confidence and actual knowledge.

More than one in four respondents said they used social media for investment information. About one in five reported relying on social media when deciding what stocks to invest in. Nearly 75% used traditional media for investment information.

The study also found social media users traded more frequently than people who preferred traditional media. The authors point to fear of missing out (FOMO) as one possible explanation: constant exposure to talk of the next big opportunity can encourage quicker, sometimes impulsive trades.

# How researchers interpret the gap

The authors describe social media as making financial content easier to find and less intimidating for newcomers. Platforms can democratize access to information, providing entry points for people who previously avoided investing.

At the same time, social media lacks the regulatory framework that governs financial professionals. Anyone can post financial opinions or simplified explanations, and short videos or posts can omit nuance. The researchers conclude that social media increases perceived knowledge without necessarily increasing deeper understanding or the ability to verify whether a product fits an investor's needs.

# Practical guidance for readers

• Treat social media content as a starting point, not as verification. Use it to find topics and questions to research further.

• Before making significant financial decisions, seek professional advice or test basic concepts using reliable educational resources.
• Be aware of behavioral drivers such as FOMO, which may push you toward quicker trading without full information.

# Where the study was published

The research appears in the International Journal of Bank Marketing and is reported by the University of Georgia.

# Bottom line

Social media expands access to investing conversations and can lower barriers to entry. But according to this larger survey of U.S. investors, using social media for investment information raises confidence more than it raises actual, testable knowledge. Verify claims and consider professional guidance before acting on social media investment tips.