FINRA has launched an online advertising campaign, Get Your Head in the Trade, designed to target new investors who are often unaware of the importance of setting goals, risk tolerance, and risk management.
The campaign encourages new investors to understand investment risks and rewards as well as their own financial goals and risk tolerance before making an investment decision.
“Millions of investors enter the market each year, about half of them are self-directed”
Marcia Asquith, Executive Vice President, Board and External Relations at FINRA, said: “Millions of investors enter the market each year, about half of them are self-directed, and many are using social media as a primary source of information. FINRA is expanding our outreach to meet investors where they are and provide resources to help them make informed investment decisions.”
One of the campaign’s posts is titles ‘Am I trading under the finfluence?’ and highlights the issues with the rising popularity of financial influencers in social media.
According to data from the FINRA Investor Education Foundation’s National Financial Capability Study, investors who are new, younger or use social media for investing information are more likely than more experienced investors to engage in riskier behaviors, FINRA stated:
- Over half of new investors invest in crypto assets, nearly one-third trade options, and about one-in-five purchase securities on margin.
- Holding microcap or penny stocks in one’s investment portfolio was associated with using social media for investment information.
- About 26 percent of social media users traded more than 10 times a month compared with about 17 percent of non-social media users.
‘Get Your Head in the Trade’ will run for three months on various platforms, including Instagram, YouTube, Spotify and Yahoo! Finance. FINRA.org/tradesmart equips new investors with knowledge, skills, and tools.
