Fidelity found that new investors were more familiar with niche investment strategies like trading cryptocurrencies.
Those who want to get into investing have more access to financial content than ever on social media. Whether it’s meme stock threads on r/WallStreetBets or TikTok “finfluencers” breaking down trading strategies, young traders’ social media feeds are crowded — and many of them are relying on them to guide their investment decisions.
Almost half of self-directed traders with less than five years of experience said they had made a bad financial decision based on social media content, while a third of these traders said “most” of their investment information comes from social media, according to a new study from Fidelity. Just 11% of investors with more than a decade of trading under their belts said social media is their primary source, and 17% reported they’ve made a decision they regret.
It might seem obvious that the first goal of investing is to make money, but Fidelity found that new traders also have an appetite for mastering new investment strategies.
Half of new investors said their main goal is to advance their knowledge, while seasoned traders are more focused on limiting losses. That hunger to learn shows up in their willingness to explore niche strategies like cryptocurrencies, covered calls, and securities lending. In fact, 69% of new traders reported feeling comfortable investing in crypto and altcoins — more than double the 29% of veteran investors who said the same.
Meanwhile, the annual financial literacy evaluation from the Financial Industry Regulatory Authority found that younger investors are improving their understanding of an important economic concept: inflation. The percentage of 18- to 34-year-olds answering the survey’s inflation question correctly in 2024 increased 10% from 2021 (going from 34% to 44%). They trailed investors 55 and older overall, though, who answered correctly 72% of the time.
Inexperienced traders also tend to be the most confident in their investments. Some 56% of beginner traders expect their portfolio to perform better in the year than it did in the last, compared with just a third of those with experience trading for 11 years or more, Fidelity found. That’s despite nearly half of all respondents saying they expect the market to perform worse in the coming year.
New investors may be more eager to learn and experiment with trending strategies, but their heavy reliance on social media can often lead to costly mistakes, a recent Fidelity survey found. For anyone starting out, pairing curiosity with credible research — and leaning on trusted resources over online hype — can help build long-term investing confidence without any unnecessary regrets.
