You have some basic knowledge, but need an expert to get you through, day after day. Most importantly, you need an experienced guide to avoid injuries. You may have tried many times before, given up and then tried again. There’s a reason: you really want good health.
The same works for stock investing. You really want to gain financially. You know some stuff that could help for a while, but need expert guidance in the long run.
India has witnessed an increase of approximately 10.4 million active investors over the past 12 to 15 months. Economic uncertainty brought about by the pandemic turned many eyes towards equity. They are looking at the long term. This prospect is both delightful and dangerous.
Type ‘investment tips India’ on Google, and a staggering 7.69 million search results would appear in 0.64 seconds. The typical Indian ‘go-to Google’ solution has to be nipped in the bud.
The ‘Finfluencer’ Influenza is viral
A plethora of investment apps, YouTube channels, WhatsApp groups, TikTok videos, chat rooms and Twitterati has made equity investing a very ready-at-hand affair. Check this – as of February 2021, the hashtag #investing on TikTok alone had about 1.6 billion views!
India’s pandemic-hit market witnessed kneejerk reactions, as millions of young and old Indians looked to secure their savings. Investment advice, information and tips are being found in the most unlikely places. It is unmindfully posted, followed and, worse, put into play: zero credibility, zero accountability.
Investors are being targeted with well-packaged and creatively presented content by new-age financial influencers. An influencer marketing report by Business Insider Intelligence forecasts influencer marketing spends to hit $10 billion by 2022. This is a jump from $2 billion in 2017.
Is this power warranted when it comes to investing in the future? An unsuspecting millennial investor has to realise that the number of views has nothing to do with real financial acumen. And even lesser related to stock market gains.
Building Investor Immunity is Key
How do you know someone’s expertise, then? Check the performance of investment brokers and firms first. Then the number of active clients. These ascertain credibility. And the absolute benchmark – Sebi registration – the anchorage in the equity market playground.
Accountability is something that you will never find in a chat room or in WhatsApp groups. Experienced brokerage firms have longstanding commitments to clients and are accountable for their decisions. Day after day, they advise portfolio planning, bespoke investment strategies and market tolerance. A full-service brokerage offers research reports on companies and sectors of your interest. These should navigate your investment decisions. There’s a towering difference between research and analysis and re-hashing it as a slick ticker or graphic in a 60-second video.
You won’t find solace or solutions in your stock market chat group on a bad day, but you will find it in your broker, who has been in the game long enough to know future outcomes.
Monitor the Dosage You Take
While investors may still want to stay tuned in to the opinions of this social media-generated financial advice, actual investment decisions must only be made in consultation with brokers of repute and experience.
The most important takeaway remains ‘credibility’. Trust and follow Sebi-certified investment advisers only. Look outside of chat rooms and beyond Likes & Subscribers. What you’re getting maybe free of charge, but what you lose will be a dear cost. Stick with professionals who have their finger on the pulse of the market.
Go back to my opening question – If your doctor told you to lose weight, who would you consult – a gym trainer or a graphic designer? Don’t bust your lifetime’s financial wellness by catching a viral influence. Fake trending is temporary; real trading is forever.
(Gagan Singla is Chief Digital Officer with HDFC Securities. Views are his own)
