For many who wade into the waters of DIY investing, those first few steps begin in shallow waters. With no lifeguard on duty and countless warnings of sharks and other dangers, those first steps can be nerve wracking. And yet, despite the nerves, and the warnings, the promise of fortunes and financial freedom continue to lure investors into the deep waters of DIY investing.
While safety is never an outright guarantee, there are pockets of helpful and well-intentioned investors online. Where these pockets are, at least for Canadian investors, is less of a mystery than who might be participating in them.
In this piece we take a look at an increasingly popular source of personal finance information – Reddit, and walk behind the curtain with the ‘subreddit’ moderator of the personal finance Canada subreddit. (In reddit fashion, for those who wish to skip to the ‘TL;DR’ summary, click here)
The online DIY investor journey often begins behind a keyboard with the first stop being a search engine. After typing in their best guess into the search box, the search engine tosses back it’s best guess of what that visitor wants to know about. For beginner investors, and for anyone really, it’s hard to know what you don’t know. So, a back and forth game of search pong ensues and eventually (or hopefully) an investor finds something useful.
Catch of the Day
So, just what does a novice investor get back by casting their net with the term ‘online investing?’ The image below is pretty typical.
Lots of advertising. Lots of financial service providers and very little, if any, support. There’s a reason why Google has generated more than $42.7 billion in advertising revenue year to date.
The Thrill of the Hunt
DIY’ers are a special breed, however. They are a persistent lot. They endure trawling through questionable search results until they find something that can get them closer to answer.
Of course, being able to ask a question to someone (or many people) more knowledgeable would be a much more efficient search strategy. And, for many who seek answers online, the place they can generally find them is in an online forum.