TikTok’s popularity has extended beyond entertainment, emerging as an unexpected platform for financial advice. Financial influencers, or “finfluencers,” on TikTok have gained a substantial following, particularly among younger audiences, by sharing stock-picking tips and investment strategies. Huh, us smart dudes owned NVDA 5 years ago when Tiktok was nothing — billymoeby (@chillbill26) August 16, 2024 A study by BestBrokers examined 20 of the most-watched stock-picking videos on TikTok from 2023 to June 2024 and found that over 64% of the 87 stock predictions made in these videos were accurate. This success includes significant gains in AI-related stocks such as Nvidia and Qualcomm, with Nvidia’s stock increasing by 63.08% during the period. Comment While some finfluencers have demonstrated an ability to pick winning stocks, the broader context of a strong U.S. stock market during this period may have contributed to their success. Comment Gerald Wong, founder and CEO of Beansprout, a Singapore-based investment advisory platform, pointed out that it might not be fair to attribute these accurate predictions solely to the finfluencers’ expertise. Wong emphasized that the general market’s positive performance likely played a major role. Moreover, there are concerns about the credibility of finfluencers. Unlike professional financial advisors, finfluencers operate in an unregulated space, which raises questions about their objectivity and the potential for conflicts of interest. Jiang Zhang, head of equities at First Plus Asset Management, highlighted the risks of front-running, where influencers might recommend stocks they own to boost prices before selling. Additionally, many of these influencers may lack professional certifications or affiliations with regulated financial institutions, further complicating the trustworthiness of their advice. Comment Jeremy Tan, CEO of Tiger Fund Management, also expressed skepticism about the long-term reliability of finfluencers’ stock predictions. He noted that while they may have been successful in the short term, this does not guarantee that their advice will hold up over longer periods. Despite these warnings, experts acknowledge that finfluencers do play a role in promoting financial literacy, particularly among younger generations who may be less inclined to seek traditional financial advice. Beansprout’s Wong noted that younger investors, particularly those from Generation Z, often prefer to learn about investing through self-directed means, including social media platforms like TikTok. Comment This preference is reflected in a survey conducted by Beansprout, where more than half of the respondents expressed a lack of confidence in their investment decisions, highlighting a gap in access to expert financial advice. Emelia Tan, director of research and financial literacy at the Singapore Exchange, suggested that finfluencers could help bridge this gap by providing relatable, easy-to-understand content that simplifies complex financial concepts for retail investors. “Very often, insufficient disclosures are provided for the public to discern the independence of such recommendations,” he added. Instead, their content should be used as a starting point, with investors seeking out additional guidance from regulated financial institutions to ensure they are making well-informed decisions. While TikTok finfluencers have garnered attention for their accurate predictions during the recent AI stock rally, their advice should be cautiously approached. Comment The unregulated nature of their work and potential conflicts of interest make it risky to rely solely on their recommendations. For young investors, finfluencers can provide an introduction to the world of investing, but professional financial advice remains essential for making sound and secure financial decisions. For more news and trends, visit AI News on our website.
Recently, these influencers have drawn attention for their accurate predictions of the artificial intelligence (AI) stock rally during the first half of 2024.
byu/washingtonpost from discussion
inu_washingtonpost
However, despite this impressive track record, financial experts urge caution when following advice from these influencers.
by from discussion
infinancialindependence
by from discussion
infinancialindependence
byu/washingtonpost from discussion
inu_washingtonpost
byu/washingtonpost from discussion
inu_washingtonpost
TikTok Finfluencers Nailed the AI Rally, But Credibility Questions Persist!
-
Digital marketing enthusiast by day, nature wanderer by dusk. Dave Andre blends two decades of AI and SaaS expertise into impactful strategies for SMEs. His weekends? Lost in books on tech trends and rejuvenating on scenic trails.Dave Andre
Digital marketing enthusiast by day, nature wanderer by dusk. Dave Andre blends two decades of AI and SaaS expertise into impactful strategies for SMEs. His weekends? Lost in books on tech trends and rejuvenating on scenic trails.
Key Takeaways:
“We believe this reflects how access to expert investment insights has not caught up with the proliferation of investment platforms and products in the market,” Wong said.
Zhang said, “compared with traditional financial news media that report mostly factual events, the finfluencers’ investment narrative offer retail investors the most value as it helps the viewers on how to craft an investment view based on publicly available information.”
“Furthermore, a single period coincident result does not translate to a definitive conclusion of predictability in the long run.”
“Recommendations or opinions found online could often be biased, unverified and provided by individuals that are not professionally certified or regulated.”
Was this article helpful?
YesNo
Digital marketing enthusiast by day, nature wanderer by dusk. Dave Andre blends two decades of AI and SaaS expertise into impactful strategies for SMEs. His weekends? Lost in books on tech trends and rejuvenating on scenic trails.
