Social Media Reliance Tilts Investors Toward Short-Term Goals at Every Age

Retail investors increasingly get financial information from social media feeds rather than from advisors, filings, or the financial press. A new study finds that this habit goes along with a shorter investment horizon, and that the pattern is not limited to the young.

The authors are three faculty members in the Department of Finance and Economics at McCoy College of Business, Texas State University: Augustine Tarkom, Assistant Professor of Finance, and Ken Moon and Vance Lesseig, both Associate Professors of Finance. The paper appears in Finance Research Letters.

The study

The researchers use the National Financial Capability Study, a large national survey of U.S. adults sponsored by the FINRA Investor Education Foundation. They pool the 2021 and 2024 waves, which gives them two snapshots of investor behavior a few years apart.

The key variable is social media reliance, meaning how much an investor depends on social media as a source of investment information. The authors relate that reliance to what investors say drives their investing: short-term motives, such as quick gains, versus long-term motives, such as retirement. They also look at how often investors trade, and at overconfidence, the tendency to rate one’s own financial knowledge above what a test of that knowledge shows.

What the researchers found

Social media reliance is positively associated with short-term investment motivation and negatively associated with long-term motivation. That result holds across all age groups. It is not a story about young traders alone. Older investors who rely on social media also lean toward the short term.

Overconfidence changes the picture in an uneven way. It strengthens the negative link between social media reliance and long-term motivation. Investors who both rely on social media and overrate their own knowledge are the least likely to describe themselves as long-term investors. The moderating effect is asymmetric, meaning it does not appear to the same degree on the short-term side.

The trading data add a twist. Overall, social media users trade more than non-users. But among investors who say they are motivated by short-term gains, the connection between that stated motive and actual trading frequency is much weaker for social media users than for non-users. Stated intentions and behavior diverge for this group.

The findings are stable across the 2021 and 2024 waves. They also survive alternative ways of measuring social media reliance, which suggests the result is not an artifact of one survey question.

What it means for advisors, platforms, and regulators

For financial advisors, the age result matters most. Clients of any age who get their ideas from social media may be drifting toward short-term thinking without realizing it. Asking where a client gets information is a cheap way to spot that drift early.

The overconfidence finding points to a specific risk group. Investors who feel sure of their own knowledge and who rely on social feeds are the ones most detached from long-term goals. Education efforts that test knowledge, rather than just deliver it, may help them see the gap.

For brokerages and investment platforms, the trading result is a caution. Social media users trade more, but not in a way that tracks their own stated goals. Product design and nudges that connect trading activity back to the investor’s stated horizon could close that gap.

For regulators, the study adds survey evidence to the debate over social media and retail investor protection. The horizon effect is broad, repeatable across years, and tied to a measurable trait. That makes it a reasonable target for disclosure and investor-education policy.

This summary is based on the paper’s abstract. The full article reports the data, methods, and detailed results.

What it means for managers

• Social media use is tied to shorter horizons. Investors who rely on it report more short-term motivation and less long-term motivation, and the pattern shows up in young and old investors alike.
• Overconfidence makes it worse on one side only. It strengthens the negative link between social media reliance and long-term motivation, but does not change the short-term side in the same way.
• Stated goals and actual trading do not line up neatly. Social media users trade more overall, yet among short-term-minded investors the link between saying so and trading often is weaker for users than for non-users.

Tarkom, A., Moon, K. P., & Lesseig, V. (2026). Scrolling toward short-termism: Social media reliance, overconfidence, and investment horizons. Finance Research Letters, 107, 110388. 10.1016/j.frl.2026.110388