A new term is gaining in popularity: social investing. It’s the concept of investing with the support of a community, and it’s facilitated by just a handful of investing apps. This concept is positioned to be the next step in the evolution of consumer investing due to the fact that a community may be better positioned to help new investors educate themselves about personal finances.
The evolution of investing
Investing was once a pastime reserved for the wealthy. You gave your money to your broker, and they worked their magic. What that magic was, few knew. But with rising economic inequality around the world, tech companies saw an opportunity to level the playing field and grant the power of investing to everyone. These companies, like eToro, created apps that could give consumers direct access to stocks, crypto, and more. Features like fractional investing further this by making it possible to own a piece of any stock for as little as $10.
Technology has brought everyone closer to Wall Street, but it also fed us to the wolves. Solitary investing apps (ones without the support of a social network) don’t allow for users to engage and see what others are investing in. Without that level of education and guidance, the new investor could feel lost and expose themselves to additional risk. The investing world would need to evolve yet again to course-correct.
Community vs individual
Instead of being thrown into a black box of confusing and intimidating financial lingo, eToro places new investors into a social network, where you can ask questions and engage with people at various experience levels. The eToro News Feed displays content and comments by investors you follow. The asset pages not only allow you to invest but also engage in conversation about the asset. And just by selecting the profile of another user, you can see what they’re invested in. This was all done to help solve the problem of solitary investing, create bonds between like-minded people, and build confidence for the novice investor.
CopyTrader: Mirroring the crypto moves
For the crypto trader, eToro has a one-of-kind solution — you can select a Popular Investor on the platform and copy their moves automatically. Simply allocate the funds you want to dedicate to copying them, and those funds will be divided proportionally across the crypto assets they’re trading. It’s a great way to learn and develop as a crypto investor, while leveraging the knowledge and time of more experienced investors.
Community: A value rarely seen
While the idea of combining a brokerage platform with a social network may sound like a sensible next step for the investing world, this feature is rarely seen. eToro continues to be the world’s leader in this space, supporting a community of over 25M global investors. And if you’ve ever felt lost or alone in the investing world, that kind of community might just be worth a look.
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