What Drives Gen Z to Social Investing?

Between 2002 and 2021, there was a huge influx in new retailers and traders who were both at-home and retail. This resulted from a combination lockdowns and a lack of outdoor entertainment, which led many people to look for entertainment within their computer. The keywords “Forex” and “Crypto Trading” on Google saw a huge boost in searches as the trends of consumers rapidly moved online.

It was an extraordinary year for Bitcoin traders with Ethereum and Bitcoin prices rising to more than 265% in the last two years. That all paled into insignificance compared to Solana’s gains of 9683%. It created fear of missing out (FOMO) for traders who never traded.

On the heels of these, meme trading saw its day. A group of young traders met on Reddit’s WallStreetBets Board to trade shorted stock options. AMC and GameStop were their most impressive attempts. Members quickly gushed about the Lamborghinis they bought. This taste of success led more and more newbies into the trading arena, however, it quickly became clear that as a trader you need more than beginner’s luck to enjoy success.

Investing in GenZ and Millenials

An unprecedented storm was created when the US government and other countries gave stimulus checks to individuals. This made more money available to traders who hadn’t traded before.

This subset of people grew up with social media and internet togetherness as a core part of almost all they do. This is also how many people get their investment advice, turning to Instagram and TikTok influencers for help.

Qualtrics for Credit Karma reported that the vast majority of Gen Z look up financial information on Instagram (57%) and TikTok (52%). Financial Industry Regulatory Authority fears this because newbie investors are being set up for unrealistic expectations by the meme stock and crypto trading craze.

The potential for institutions to tap into this new investor pool has been recognized and some have even begun to collaborate with GenZ influencers. However, some influencers are making use of their large following to help move asset prices by placing multiple trades at once. It worked well for meme stocks so why not the main stocks.

Follow the trades real traders make

Investors beware, however: following influential investors without a track record in investing is not advisable. You can copy trade. Copy trading is not new, in fact, in the online trading markets, it’s been alive and kicking for over a decade with names like the forerunner eToro.

You can follow the traders and copy their trades. NAGA is another popular copy-trading platform. NAGA, a Frankfurt Stock Exchange-listed company is publicly traded. NAGA is a publicly traded company on the Frankfurt Stock Exchange. The company has provided trading solutions for over 1,000,000 traders since 2017.

The popular and widely used copy trading tool is part of the suite. It’s available on mobile and web. The app allows traders new to trading to view the success rates and see which traders have copied their trades. It also shows how many are doing so, as well as their return and success rates. Trader can then simply copy their trades, pause and stop whenever they like. Investors and new traders can get exposure to the market with no prior knowledge. You could even learn how to trade from the professionals.

The Final Word

There’s no doubt that to be a successful trader overall, a person needs to have an understanding of the markets and what moves assets. Without this, you can have beginner’s luck but not much more than that. GenZ should learn how to trade without following any influencers, or copy real trades with transparent track records.



Image source: DepositPhotos.


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