Investment advice is only a scroll away. But new research from the University of Georgia suggests that relying on social media for financial information may leave some investors feeling more knowledgeable than they actually are. The study found a notable gap between how confident social media users felt about investing and how much they actually knew.

Researchers found that people who relied on social media to guide investment decisions reported high confidence in their knowledge, yet struggled with basic questions about topics such as stocks and short selling. By contrast, people who obtained investment information from traditional media, including newspapers, magazines, television and radio, tended to have both greater confidence and stronger actual knowledge.

“Basically, we find that when people are using social media, it increases their confidence but not their real knowledge,” said Swarn Chatterjee, a professor of financial planning, housing and consumer economics and corresponding author of the study. Xiaoyuan Sun, the study’s first author, noted that social media users may encounter plenty of investment information without developing a deeper understanding of how investments work or whether a particular product suits their needs.

To examine whether investors’ confidence matched their knowledge, researchers analysed data from two national surveys involving more than 2,500 U.S. adults with investments outside retirement accounts. Participants rated their investment knowledge on a scale from one to seven and then answered 11 multiple-choice questions covering stocks, bonds, risk and return, index funds, short selling and options.

More than one in four respondents said they used social media for investment information, while about one in five relied on it when deciding which stocks to invest in. Platforms included YouTube, Facebook, Reddit and TikTok, as well as online groups and message boards. By comparison, nearly 75% of respondents used traditional media as a source of investment information.

Social media users also tended to trade more frequently than those who preferred traditional media. Chatterjee suggested that fear of missing out, or FOMO, may contribute to this behaviour. Constant exposure to discussions about the “next big” stock or investment opportunity can create pressure to act quickly before an apparent opportunity disappears.

Still, the researchers emphasised that social media is not necessarily bad for investors. Online platforms can make financial information more accessible and less intimidating, potentially opening investing to people who might otherwise find it difficult to understand. However, accessibility does not guarantee accuracy or completeness. Unlike regulated financial professionals, virtually anyone online can offer financial opinions, and short posts or videos may leave out important details.

The researchers recommend treating social media as a starting point rather than the final word. Investors should question what they see, verify information through reliable sources and consider professional guidance before making significant financial decisions. Chatterjee compared online investment advice to searching the internet for medical information: it can provide useful background, but important decisions deserve further verification. “Investment knowledge still matters,” he said. “Proceed with caution.” The study was published in the International Journal of Bank Marketing.

More information: Xiaoyuan Sun et al, From media exposure to trading behavior: evidence from social media, traditional media and investor knowledge, International Journal of Bank Marketing. DOI: 10.1108/IJBM-01-2026-0001

Journal information: International Journal of Bank Marketing Provided by University of Georgia