The events surrounding Reddit’s r/wallstreetbets community have completely turned Wall Street upside down. However, this shift to the power of the retail investor has been brewing long before Monday, January 25th, 2021.
Since COVID-19 hit in March 2020, Canadians have faced a difficult job market, economic instability and a low interest rate environment, and many are turning to new ways of improving their financial conditions. With the rise of easy to use DIY investing platforms, and volatile market conditions, many Canadians have turned to active investing to make the most of their funds. TradingView, a global fintech with over 20 million global users and 2 million in Canada, revealed that 63% of Canadians traded more than ever in 2020, and it’s not slowing down. Until recently, such ease of access had been impossible, with a lack of market information and frictionless technology to bring investing ideas to life.
The power of the retail investor has become clear this week with the meteoric rise of GameStop-like stocks, led by Reddit’s r/wallstreetbets, sending shockwaves through the retail investor community, institutional investors and hedge funds alike. Even Canada’s very own BlackBerry has become a part of the mania.
Rise of the DIY Investor
Historically, active investing was left to the folks on Bay Street, or down in lower Manhattan, because only they had direct access to the tools and information to be successful in financial markets. This is no longer true with alternatives to Bloomberg’s trading terminal (which costs over $20,000 a year) like TradingView, which provides real-time market data and charting, along with a social forum where people can chat and share ideas with fellow investors.
As a result of this accessibility, a new class of modern, sophisticated and informed DIY investors have sprung up, following stock market trends in real time and chatting with fellow investors around the world while still at home – taking to platforms ranging from mostly social, such as Reddit, to heavily analytical ones. (In fact, 29% of Canadian TradingView users admitted to trading while in the bathroom in 2020.)
For those looking to start their investing journey and long-time active investors who are always looking to grow, here are some ways to stay informed and on the cutting edge of investing.
The Investor Community
With new technology that enables digital connection between investors, doors are opened for more opportunities for investors to connect with their peers, in real-time. One of the best ways to learn about investing is to reach out and connect with the investor community. We are armed more than ever before with the tools to reach people globally, so take the time to follow investors on LinkedIn and other social platforms, to grow your professional network and receive first-hand expertise from industry experts.
An advantage for younger generations who have grown up with social media is that many features in fintech apps and websites will feel intuitive. Similar to social platforms, fintech has adapted to make information more accessible to younger users and more engaging for those who may not have a deep understanding of the financial industry. To make it easier for investors to interact with financial experts, TradingView adapted live streaming, akin to Twitch, with Streams. There, people can watch financial experts trade and discuss financial topics in real time, while interacting with other users on the platform. This feature helps increase user experience, as well as promotes a circular learning environment.
Look Before You Leap
Beyond learning from experts, a powerful tool for DIY investors is to have conversations and learn alongside like-minded people around the globe, who share similar interests and are as passionate about learning and the markets. This is easier than ever with digital technology connecting people from across different demographics and countries. Well-informed discussion is essential to developing critical thinking and applying investment concepts. It is important to be in an environment where the conversation is data-backed and easy to fact check.
One particular feature that embodies this practice is TradingView’s Ideas, how users post their own trades, analysis and predictions, and others give feedback. Users are unable to delete their comments, creating a standard of transparency in conversation. Participants are pushed to be more thoughtful with their discussions and it’s easier for users to determine who is credible and which people are worth learning from.
Connecting the Stock Market to Current Events
Knowing many investors are driven by data-backed information, DIY investors quickly learn that the stock market works in tandem with the current events. Current events heavily influence price movements, and creating new habits of consuming daily news or business publications, such as Bloomberg that contextualize stock movements within larger real world events is essential to understand stock trends.
For someone new to investing, it can be difficult to see the connections between breaking news, policy changes and current trends. To get a quick idea of how events tie together, users can take a look at TradingView Timelines – the first comprehensive view of a company’s history, groundbreaking moments and the events that got the company to where it is now. Currently, there are timelines for Tesla, Shopify and the ever enigmatic Bitcoin. For the first time, investors can look at the stock price history of a company, easily sift through the real-world events that impacted their stock, and look further into each moment through articles from reputable news sites – all in one place. Through this, investors can learn to recognize connections between the
world around us and the stock market, developing the inherent ability to make informed investment decisions.
There is no better time for people to explore new ventures. This past year has shown us the importance of slowing down, creating connections and making info-backed decisions.
Technology gives people the ability to connect on a global scale and access an unparalleled level of data, and the rise of a new, modern group of investors is an example of just that.
Pierce Crosby is the General Manager of TradingView, one of the fastest ways to follow the financial markets. The platform empowers investors and traders with powerful charts, tools, and social networking. TradingView’s world-class HTML5 charts created a new industry standard. TradingView connects people from all backgrounds to financial markets and offers additional upgrades to those who need more data or features to enhance their trading experience. Get started by visiting TradingView.com or downloading the free TradingView mobile apps for iOS and Android.