Investment advice is only a scroll away. But new research from the University of Georgia suggests social media may leave some investors feeling more knowledgeable than they actually are.
The researchers found people who relied on social media to guide their investment decisions felt very confident in their investment knowledge. But they struggled to answer basic questions on investment-related topics like corporate stocks and selling short.
People who gleaned their investment information from traditional media, such as newspapers, magazines, TV and radio, felt like they knew their stuff and actually did.
“People have a lot of ways to access information now,” said Xiaoyuan Sun, first author of the study and a doctoral student in UGA’s College of Family and Consumer Sciences . “But if they’re getting their investment information off social media, they probably don’t know the deeper things. They don’t know how it works, and they cannot verify that an investment product is the right fit for them.”
“Basically, we find that when people are using social media, it increases their confidence but not their real knowledge,” added Swarn Chatterjee , corresponding author of the study and a professor of financial planning, housing and consumer economics.
To determine whether investors’ confidence matched their actual knowledge, the researchers relied on data from two national surveys of more than 2,500 U.S. adults with investments outside of their retirement accounts.
People were first asked to rate how much they thought they knew about investing on a scale from 1 to 7. Then came the reality check.
The respondents answered 11 multiple-choice questions about investing, covering everything from stocks and bonds to risk and return, index funds, short selling and options. The survey included questions such as “have you ever purchased a ‘meme stock’ or other investment that was trending on social media?” and “have you ever heard of bitcoin or cryptocurrencies?”
We find that when people are using social media, it increases their confidence but not their real knowledge.
The survey also asked whether respondents relied on social media groups or message boards when choosing investments and whether they used platforms like YouTube, Facebook, Reddit and TikTok to learn about investing.
And plenty of them did.
More than one in four said they used social media for investment information, while about one in five relied on it when deciding what stocks to invest in. Meanwhile, nearly 75% used traditional media for investment information.
The study found the participants who used social media for information tended to trade more often than those who preferred traditional media sources.
Chatterjee said the fear of missing out, or FOMO, may play a role. “If you’re constantly seeing people talk about the next big stock or investment opportunity, it can be tempting to jump in before you feel like you’ve missed your chance.”
That doesn’t mean social media is all bad news for investors. Platforms like YouTube and Reddit make financial information easier to find, especially for people who may have previously found investing intimidating or confusing.
“In some ways, social media is democratizing that,” Chatterjee said. “So it’s helping expand access to people.”
But easier access doesn’t always mean better information.
Financial professionals have rules and regulations that govern what they do; people on social media don’t. On social media, anyone can offer financial information or opinions. And while short videos and posts can make complicated topics easier to understand, details can get lost along the way.
The researchers aren’t telling investors to delete their apps. But they do advise consumers to get better at questioning the financial information they find there.
Chatterjee compared it to searching for medical advice online. The internet might give you an idea of what’s wrong, but you should probably consult a doctor before making an important medical decision.
The same principle applies to money.
If you’re constantly seeing people talk about the next big stock … it can be tempting to jump in before you feel like you’ve missed your chance.
“It’s good to seek information. And social media can be a sounding board,” Chatterjee said. But before making major financial decisions, he recommends verifying that information and seeking professional guidance.
And that may mean learning to navigate a whole lot of noise.
“Investment knowledge still matters,” Chatterjee said. “Proceed with caution.”
The study was published in the International Journal of Bank Marketing.
International Journal of Bank Marketing
From media exposure to trading behavior: evidence from social media, traditional media and investor knowledge
6-Jul-2026