The popular creators of the social media platform TikTok are jumping on the stock market bandwagon, exposing millions of viewers to misleading financial advice, according to a new analysis. A survey of more than 1,000 TikTok videos linked to stocks by crypto exchange Paxful found that 14% did not offer a disclaimer that could warn viewers of the risks. These videos totaled 28,4 million views and 3,6 million likes. Much of the offending content advised subscribers to buy specific assets, rather than a broader asset class or genre, and was often guilty of implying a guaranteed profit or suggesting a specific purchase volume. More than half (52%) of the TikTok accounts analyzed had posted at least one "misleading" article, the vast majority (60%) of creators did not include a disclaimer in their bio, and only 10% offered information. about your grades.
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Over the past week, interest in trading among individual investors has skyrocketed due to the dramatic rise in the value of GameStop shares. The price hike was driven by an organized group of amateur investors on the social platform Reddit, which aimed to put pressure on short sellers. While some will have benefited from the effort, others likely suffered heavy losses from the price correction that soon followed, highlighting the risks associated with financial advice shared on social platforms (although many publishers were diligent in flagging their posts). The surge in interest also appears to have spilled over to alternative services, such as TikTok, which primarily caters to younger demographics with fewer resources to gamble on speculative investments. "The recent bull market and market volatility have sparked increased interest in learning about investing, as well as people using social media to sell get-rich-quick courses to uneducated beginners," the financial psychologist explained. Brad Klontz. To mitigate the risks of financial advice shared on social media, Dr. Klontz suggests it's essential to take the time to research the creator's qualifications and also seek additional advice specific to personal needs and means. The biggest red flag, he says, occurs when a creator makes a very specific recommendation, advising his followers to buy a specific stock or insurance product. “TikTok is the fastest growing social media platform. Like it or not, people get information and invest in personal finance,” said Dr. Klontz. “These platforms can be useful for education, but the content should never be used as advice. There is no single investment approach that is right for everyone. Therefore, blanket advice is rarely appropriate. "