There was a time when investors complained that they did not have enough information. Today, the problem is almost the opposite. A retail investor can see a WhatsApp message about a stock, watch a YouTube video, read a Telegram tip, follow a financial influencer and hear market commentary on television within minutes.
The problem is no longer finding information. The problem is deciding which information deserves to be trusted.
SEBI's Investor Survey 2025 shows how important these informal sources have become. Nearly 59% of investors rely on friends, family and colleagues for securities-market information. Around 56% use financial influencers, while 34% use online investment communities such as Telegram, WhatsApp, Reddit and Facebook groups. Financial news and blogs are used by 28%, while financial professionals and market or company analysis reports are each used by about 25%.
Almost 60% of surveyed investors said they had seen or heard securities-market information on social media during the three months before the survey. YouTube was the most commonly used platform, followed by Instagram and Facebook. More importantly, 93% considered financial influencers moderately to highly credible, while 62% said they make at least some investment decisions based on influencer recommendations.
These numbers show that social media is no longer just a source of financial education. It has become part of the investment decision-making process.
Information, opinion and recommendation are different
A company reporting that revenue increased 20% is a fact.
Someone saying that the stock will rise because revenue increased 20% is an opinion.
Someone telling investors to buy the stock is a recommendation.
On social media, all three can appear in the same 30-second video. The investor therefore has to determine what is actually known and what is simply someone's interpretation.
This distinction becomes particularly important with live trading content. A trader may show a ₹20,000 profit from one options trade. But the viewer may not know how many losing trades occurred, the capital used, transaction costs, maximum loss or whether every trade is being shown.
A profitable trade proves that one trade made money. It does not prove that the strategy is profitable.
More information can create more noise
NISM recently highlighted financial noise created by influencers, friends and family, WhatsApp and Telegram groups, market headlines and social-media trends. It also identified fear, greed, FOMO and overconfidence as behavioural triggers.
The problem is not necessarily that this information is false.
A completely accurate piece of information can still be irrelevant to an investment decision.
If a stock falls 10%, that is a fact. Whether the investor should buy, sell or do nothing depends on why it fell, the company's fundamentals, valuation, future prospects and the investor's own objective.
Yet a constant flow of market updates can create the feeling that something must be done.
This can turn investing into a series of reactions.
Popularity is not evidence
Social media adds another powerful psychological signal: popularity.
A post may receive 100,000 views. A stock may trend. A Telegram group may have thousands of members. None of these establishes that the investment idea is correct.
Popularity tells us how many people noticed something. It does not tell us whether the underlying claim is accurate.
The same applies to friends and family. SEBI found them to be the most widely used source of securities-market information, at nearly 59%.
People naturally trust those they know. But familiarity does not equal expertise. A relative who made money from a stock may have a completely different financial goal, risk capacity, time horizon and purchase price.
Investors need a filter
The answer to information overload is not necessarily another expert to follow. Investors need a simple process for filtering information.
First, identify the source. Who is making the claim?
Second, separate fact from opinion. What can actually be verified?
Third, look for evidence that could prove the idea wrong. What assumptions are being made?
Fourth, check suitability. Does the investment fit your objective, time horizon and ability to take losses?
Finally, ask whether action is necessary. Not every new piece of information requires a trade.
The process should be:
Information to Verification to Analysis to Risk assessment to Decision
The common mistake is:
Information to Emotion to Trade
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