1 in 5 investors have used Reddit to make investment decisions
In the aftermath of the GameStop saga, Investing.com survey also reveals that Reddit’s wider and unexpected influence on investment decisions extends beyond the Millennial and Gen Z age groups.
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Investors used Reddit to actively make an investment decision
New York, NY, April 29, 2021 – Up to 1 in 5 U.S. investors have used social media platform Reddit to actively make an investment decision, the global financial markets platform Investing.com revealed today in recently released data.
According to a survey of 1,302 respondents – conducted in the wake of the episode in which Reddit users caused GameStop stock prices to soar earlier this year – Reddit’s influence is not limited to to younger demographics such as the Millennial and Gen Z age groups, with over 17% of investors over 40 also using Reddit to make financial decisions. Interestingly, nearly half of these so-called “older” investors are on Reddit or have downloaded the app from the drama that took place with GameStop earlier this year.
“This is not at all surprising, given the recent Reddit WallStreetBets Meme Stocks saga, which dominated the markets earlier this year,” said Jesse Cohen, senior analyst at Investing.com. “The sharp rise and huge gains from these names has drawn investors – young and old alike – to the WallStreetBets forum to find out which stock everyone is coordinating to buy next.”
Additionally, 55% of investors used some form of social media platform to research an investment decision. In addition to Reddit, over 20% use Twitter to make investment decisions, 17% use Stocktwits, and 7.5% use Facebook for this purpose. And Reddit or not, 47% of those polled have bought GameStop or AMC Entertainment stock in the past three months.
The GameStop drama
Almost 80% of respondents who use Reddit to make investment decisions have only been doing so for a few months, according to the GameStop drama timeline. Over 70% of investors who use Reddit to make their decisions plan to continue doing so in the coming year. At the same time, only 6% of those investors say Reddit is their only source of information for investment decision making.
“The dramatic increase in retail investment appears to be here to stay, and that should bode well for social media platforms like Reddit,” Cohen continued. “These social media forums are replacing traditional financial media as the place to go to research and make informed financial decisions.”
Of those surveyed who have never used Reddit to make an investment decision, over 20% plan to use this social media platform to help them with their investment decision making during the year. coming year.
On the regulatory front, 16% believe social platforms that organize retail investors should be restricted. Eighteen percent say trading platforms such as Robinhood – which was forced to temporarily limit GameStop trading following the saga – should have the right to restrict trading to retail investors. Sixty-six percent agree that more needs to be done to protect retail investors and even the playing field against Wall Street, while only 28% believe retail investors on platforms like Reddit pose a threat to Wall Street.
“The battle between the retail investor, who entered the market amid the Covid pandemic, and Wall Street hedge funds will no doubt intensify in the years to come. The returns of the individual investor have changed the whole character of the market, and the professionals are no longer the only force that matters, ”Cohen said.
The full survey is available at: https://www.investing.com/blog/beyond-gamestop-survey-reveals-reddits-largerthanexpected-influence-on-investing-298
Methodology: This survey was conducted April 14-16 based on interviews with 1,302 US adults from the Investing.com user database. The poll has a margin of error of plus or minus 2 percentage points.