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Retail Traders More Likely to Trust ‘Finfluencers’ Than Their Family, Study Finds

Retail Traders more likely to trust Finfluencers than Friends and Family, Study Finds


New research has unveiled that over a third of retail traders in the UK express a greater inclination to heed the advice of influencers in the finance domain, or ‘finfluencers’, than that of their friends and family.

According to a survey conducted by CMC Markets, half of the retail investors admitted they would seize a trading opportunity recommended by a financial influencer, ranking family and friends as the second most relied upon source of information.

Despite a majority of retail traders (69%) initiating trading activities within the past few years, a quarter revealed that they already derive over 20% of their income from trading.

Surprisingly, traders exhibit a stronger focus on the US market than anticipated, with 45% favoring trading activities around the opening and closing of US markets, particularly following companies like Amazon, Netflix, and Apple, over British counterparts.

While the allure of FTSE 100 companies remains strong for 34% of traders, the wealthiest segment (54%) displays greater interest in Nasdaq 100 companies over any other market.

Additionally, there is palpable excitement among retail traders regarding AI, with 59% expressing a likelihood of experimenting with AI trading tools.

Jochen Stanzl, Chief Market Analyst at CMC Markets, remarked, “Retail trading has taken a very different shape to where it was five years ago. The pandemic opened the door to a whole new demographic of traders.”

He further added, “Today, as the data shows, retail trading is so much more than a hobby. And most traders are taking advantage of a highly volatile market, following economic calendars to inform their strategy, and managing their emotions well to mitigate risk.”

Stanzl also highlighted future trends, stating, “For 2024, we found that shorting IPOs will be a priority, as will closely monitoring interest rate changes and major US companies during earnings season. With AI around the corner, retail trading is set to transform even further.”

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