Nearly 4 out of 5 Gen Z, or Zoomers, get their financial advice from social media, according to a survey commissioned by Forbes Advisor1. Of the social media platforms listed, YouTube and Reddit emerged as the top sources of financial information for young people.

The pull of these sites can be surprising. Reddit, which takes up only a tiny social media footprint, is home to dozens of investment-focused communities like r/WallStreetBets and r/pennystocks.

Having financial and investment information at a finger’s length is hands down a modern marvel without comparison. Even though social media has been around for a few decades, its knock-on effect on investment literacy and business is just beginning.

Investment Literacy in The Olden Days

Up until the mid-20th century, investing was an affair conducted almost entirely person-to-person2. The earliest stock exchanges conducted their business on little more than benches in market squares or coffeehouses with stock promoters acting like merchandisers. It was not until the 19th century that the first stock exchanges were formally established.

At this stage, there were few ways to research and study investing. Retail investors relied highly on word-of-mouth, stock promoters, financial advisors, and print advertisements. Libraries, bookshops, and newspapers would later provide more reliable access to financial information. These, however, were not always available.

For a young adult living in the 1950s, simply learning about investments demanded considerable time and maybe money. Alternatives were not easy to come by. The ordinary investor was presented with highfalutin information and faced great risks of unreliable and outdated data.

Information Made Cheap and Quick

The rapid development of computer technology in the past few decades made information cheap and quick. For investment literacy, this is a game changer. Anyone can simply look up investment lessons on their phone or on their computer through the internet.

Because of innovation, a sheer amount of investment information is now available online. Message boards and social media platforms replaced the market squares and coffeehouses of the old days. Young investors can simply select their favorite social media apps to access entire encyclopedias of information for any imaginable niche, sector, and industry.

Of course, there’s still a catch. It’s not just legitimate investment literature that is easy to come by on social media. Cheap and quick information also means that it is easy to proliferate scams and frauds. With some hype and appeal to emotion, fraudsters can make a quick buck off of unsuspecting investors.

Thankfully, equipping young investors with the investment basics is a big step to help keep them out of trouble.

How Companies Can Thrive

For companies looking to get investors on board, social media can either be a curse or a blessing. Yes, the Internet offers a historically unprecedented way to connect with markets all over the globe but with the caveat that every other player gets this same advantage.

The world wide web is now a virtual market square where everyone shouts out their own advertisements. For everyone here, the challenge is to find a way to get their message heard.

For firms that understand the power of social media, nothing beats getting a talented marketing team that is well-versed in this tool. A skilled marketing outfit can turn the company’s value proposition into the right messaging for the right audiences.

Power to the Young Investor

Social media may be a double-edged sword, but it still offers an unparalleled opportunity for investment literacy among young audiences. Though many newcomers are still testing the waters of social media as a trusted source, Zoomers are sure to be a powerful investing force in the coming decades.

Latest reports put Gen Z at about 30% of the world population3, many of whom are in emerging markets and many with growing incomes—this is a whole generation that has an unprecedented opportunity to learn early and invest early, equipped with fast and low-cost information.

As social media transforms the investment landscape, both investors and companies need to use new tools to build mutually beneficial investment strategies.

Need help?

At Global One Media, we seamlessly deliver our clients’ message to potential young investors by harnessing the extensive outreach of social media.

Connect with us today and let us start your brand’s journey in the digital space.

The information and content mentioned in Global One Media’s blog are not intended to be and do not constitute financial advice, investment advice, trading advice or any other advice or recommendation of any sort. The content found in this blog is for general information only and was created for exclusive distribution on Global One Media’s network. Global One Media presented information that was available to them at the time of writing, for informational purposes only and is not intended as investment advice. Global One Media has no investment relationship at all with any entities discussed in the blog. Investors should seek financial advice before making any investment decisions.