Invest
‘The concept of collective investing is here to stay’
The phenomenon of retail investors acting as a collective, led by social media and celebrity investors, is here to stay, says one expert.
‘The concept of collective investing is here to stay’
The phenomenon of retail investors acting as a collective, led by social media and celebrity investors, is here to stay, says one expert.
The first quarter of 2021 signalled a crazy ride for the stock markets, driven largely by online investment communities gathered on social media platforms and online forums like Reddit.
But while day-trading frenzies appear to be fizzling out, with platforms that facilitated this activist investing reporting a flatlining of the ‘movement’, one expert opined that the concept of collective investing is here to stay.
According to deVere Group’s CEO, Nigel Green, retail investors are set to become a whole lot more important.
“I believe while the mass hype and hysteria might be fading, this phenomenon of retail investors acting as a collective, and led by social media and celebrity investors, is here to stay,” Mr Green said.
“Moving forward, they are likely to be as influential as major hedge funds in moving markets,” he noted.
RMIT senior lecturer Dr Angel Zhong agrees. She opined that investor herding and the word-of-mouth effect will continue to maintain their presence beyond stock market crazes such as the GameStop saga.
“Stock market participation is affected by social learning. The prevalence of social media in investment is a catalyst,” Dr Zhong explained.
Mr Green, on the other hand, sees Elon Musk as a key catalyst in the democratising of the stock market.
But despite applauding Mr Musk’s popularity among small-scale day traders, he warned the billionaire’s admirers to be wary of the downsides.
“As we’re now seeing, many of these small-scale investors – typically inexperienced, younger people who might not necessarily have the financial resources to be resilient against usually highly speculative and volatile investments – are playing a potentially hugely costly game.
“I would urge them to adopt the cool of Elon Musk and the savvy of Warren Buffett,” Mr Green said.
He opined that the instincts and skillsets of both these mega investors combined will be a powerful strategy for any investor.
“Elon can spot future trends like very few others, focuses on sustainability, has utter conviction, takes risks, and is a master at harnessing the power of social media for business.
“Meanwhile, Warren’s focus is on time-honoured fundamentals, including diversification, cash flow and profitability,” he said.
Overall, Mr Green explained that the future of investment is this fine line between forward-thinking drive and old-fashioned principles, urging both the leaders of the new era to exercise responsibility and investors to exercise caution.
RELATED ARTICLES
About the author
About the author
Stock market
Portfolio reviews as an operating discipline: turning volatility into a competitive edge
In a higher-rate, higher-volatility world, portfolio reviews are no longer an annual hygiene task; they’re a core operating rhythm that protects cash flow, unlocks tax alpha, and sharpens risk ...Read more
Stock market
Fee war on the ASX: Global X’s A300 turns up the heat on core Aussie equity ETFs
Global X has lobbed a 0.04% management fee into Australia’s core equity sandbox, launching the Australia 300 ETF (A300) to take on entrenched giants. Read more
Stock market
Challenger IM shakes up the ASX with private credit note and a side of risk
Challenger Investment Management has taken private credit mainstream with an ASX-listed note structure—LiFTs—that secured roughly $100 million in cornerstone commitments within a day of launch. Read more
Stock market
International stocks: Diversifying your portfolio beyond Australia
In an increasingly globalized market, Australian investors have the opportunity to enhance their investment portfolio by incorporating international stocks. Diversifying your investments globally can ...Read more
Stock market
Stock market rally likely to continue regardless of Fed minutes tone, says deVere CEO
The bull run that has propelled Wall Street's major indexes to record highs this month is expected to continue regardless of the tone of the upcoming Federal Reserve minutes, according to Nigel Green, ...Read more
Stock market
US stock rally driven more by valuation growth than earnings, leaving tech names vulnerable: Innova
The strong gains in US stocks over the past year, particularly in the technology sector, have been driven more by expanding valuations than underlying earnings growth, leaving them exposed to a ...Read more
Stock market
Sun Silver to make its ASX debut with a $13 million IPO
Sun Silver Limited (proposed ASX Code: "SS1") has announced the opening of its Initial Public Offering (IPO) today, aiming to raise a minimum of $10 million and a maximum of $13 million (before costs)Read more
Stock market
Nasdaq hits record high, underscores the value of tech in investment portfolios
The Nasdaq Composite's surge to an all-time high last Friday highlights the importance of incorporating technology into investment strategies. Read more
Stock market
Portfolio reviews as an operating discipline: turning volatility into a competitive edge
In a higher-rate, higher-volatility world, portfolio reviews are no longer an annual hygiene task; they’re a core operating rhythm that protects cash flow, unlocks tax alpha, and sharpens risk ...Read more
Stock market
Fee war on the ASX: Global X’s A300 turns up the heat on core Aussie equity ETFs
Global X has lobbed a 0.04% management fee into Australia’s core equity sandbox, launching the Australia 300 ETF (A300) to take on entrenched giants. Read more
Stock market
Challenger IM shakes up the ASX with private credit note and a side of risk
Challenger Investment Management has taken private credit mainstream with an ASX-listed note structure—LiFTs—that secured roughly $100 million in cornerstone commitments within a day of launch. Read more
Stock market
International stocks: Diversifying your portfolio beyond Australia
In an increasingly globalized market, Australian investors have the opportunity to enhance their investment portfolio by incorporating international stocks. Diversifying your investments globally can ...Read more
Stock market
Stock market rally likely to continue regardless of Fed minutes tone, says deVere CEO
The bull run that has propelled Wall Street's major indexes to record highs this month is expected to continue regardless of the tone of the upcoming Federal Reserve minutes, according to Nigel Green, ...Read more
Stock market
US stock rally driven more by valuation growth than earnings, leaving tech names vulnerable: Innova
The strong gains in US stocks over the past year, particularly in the technology sector, have been driven more by expanding valuations than underlying earnings growth, leaving them exposed to a ...Read more
Stock market
Sun Silver to make its ASX debut with a $13 million IPO
Sun Silver Limited (proposed ASX Code: "SS1") has announced the opening of its Initial Public Offering (IPO) today, aiming to raise a minimum of $10 million and a maximum of $13 million (before costs)Read more
Stock market
Nasdaq hits record high, underscores the value of tech in investment portfolios
The Nasdaq Composite's surge to an all-time high last Friday highlights the importance of incorporating technology into investment strategies. Read more
