{"id":6400,"date":"2021-05-19T08:53:51","date_gmt":"2021-05-19T08:53:51","guid":{"rendered":"https:\/\/newmoneyreview.com\/?p=6400"},"modified":"2021-06-08T08:23:56","modified_gmt":"2021-06-08T08:23:56","slug":"meme-investing-risks-your-financial-health","status":"publish","type":"post","link":"https:\/\/newmoneyreview.com\/index.php\/2021\/05\/19\/meme-investing-risks-your-financial-health\/","title":{"rendered":"Meme investing risks your financial health"},"content":{"rendered":"

In the latest\u00a0New Money Review<\/em>\u00a0podcast<\/a>,\u00a0Carol McNaughton Nicholls and Rachel Rowlinson of strategy consultancy \u2018Britain Thinks\u2019\u00a0talk about the behaviours, attitudes and financial resilience of self-directed investors in the UK.<\/p>\n

Britain Thinks recently conducted and published research on self-directed investing on behalf of the UK\u2019s financial services regulator, the Financial Conduct Authority<\/a>.<\/p>\n

\"\"<\/p>\n

Carol McNaughton Nicholls<\/em><\/p>\n

One of the consultancy’s key findings is that self-directed investors\u2014those making investment decisions on their own behalf, without the help of a financial adviser\u2014are at risk of overconfidence and of suffering financial harm as a result.<\/p>\n

This risk is potentially amplified by the role of social media in encouraging herd behaviour, say the researchers.<\/p>\n

\"\"<\/p>\n

Rachel Rowlinson<\/em><\/p>\n

\u201cWhen using social media, self-directed investors are often at risk of following the algorithm because they are being served content,\u201d Rachel Rowlinson says in the podcast.<\/p>\n

\u201cThey get the sense that there\u2019s this big movement, that everyone is getting involved in this one thing and they don\u2019t want to be left behind,\u201d says Rowlinson.<\/p>\n

\u201cA big thing for this new group [of self-directed investors] is they see a lot of content, a lot of news about something as a short-cut to saying, \u2018If people are talking about it, it must be either a good investment or a shortcut to safety\u2019,\u201d Rowlinson goes on.<\/p>\n

\u201cSomething like cryptocurrency can be seen as massively overvalued, but they are not really aware of that.\u201d<\/p>\n

\u201cThey are unaware that, because they are looking at this content, the algorithm is actually tipping the scale.\u201d<\/p>\n

In the podcast, Carol and Rachel discuss their key research findings with\u00a0New Money Review<\/em>\u00a0editor Paul Amery:<\/p>\n