Three-quarters of young high-risk investors believe they feel competitive when investing in high-risk goods, according to an FCA poll. The FCA’s new InvestSmart campaign encourages consumers to make smarter financial choices and promotes smart investing with FCA.

The Financial Conduct Authority (FCA) has released new data to coincide with the launch of its InvestSmart campaign. The campaign helps new investors understand the risks they may be taking.

Two-thirds (68 percent) of the 1,000 people surveyed said they felt competitive while investing. Of those, 76% compared investing to gambling. Long-term investing was uncommon among those polled.

Survey respondents preferred steady returns over volatile investments, which often require longer periods. Still, 60% said they preferred more stable returns.

Social Media And Hype

High-risk investments are becoming more popular thanks to social media and traditional media. Many individuals have been motivated to invest in a certain investment by the media, social media, and other people’s recommendations.

In the wake of the pandemic, more than a million UK investors (six percent) raised their investments or purchased a high-risk investment (April to October 2020).

Concerned about new investors accessing high-risk products that may not be appropriate for them or represent their risk tolerance, the regulator has taken action. According to the FCA’s Financial Lives study, like it’s shown here, the majority of people who have invested believe they are better informed about financial matters than the general public. The absence of investor safety and the dangers to their money were thus unlikely to be understood by these investors

Olympic BMX gold medalist Charlotte Worthington has teamed up with the FCA. When it comes to high-risk activities, Charlotte stresses the necessity for thorough planning. Charlotte became the first woman to win BMX Freestyle gold at the Tokyo Olympics.

Charlotte Worthington on Risk and Smart Investing

The Olympic BMX gold medalist, Charlotte Worthington, said:

“To reach this stage in my career, I’ve invested a lot of time and effort. There have been highs and lows, and countless hours of training. I focused on getting the fundamentals correct, one trick at a time.

High-risk endeavors may not always go according to plan. However, preparation and knowledge are key to minimizing risks.

Small risks that don’t always go as planned are essential. They help gain the expertise needed for larger projects at the right time.”

For investors, the Financial Conduct Authority (FCA) is now launching InvestSmart, a five-year, £11 million campaign. The promotion is aimed at those who have never invested before or who are just starting out. In order to reach these investors, the campaign will target them on social media and online. Rather than succumbing to the hype, the campaign encourages investors to examine their tolerance for risk and send them to the FCA’s website for information, promoting smart investing with FCA.

A new strategy is being used to contact people who may be interested in high-risk items so they can better understand the hazards and where to receive help. We’ll be using social media and the internet to reach out to potential investors, ensuring that novices don’t fall for scams. We expect that InvestSmart will boost investor confidence by making it easier to spot fraudsters and take action against them.

Don’t Believe The Hype – Warning From FCA

According to the City watchdog, younger investors are turning to cryptocurrencies, foreign currency trading, and other high-risk items because of social media buzz and the gambling-like excitement of striving to become wealthy fast.

The regulator has now started an £11 million campaign to educate novice investors about the dangers they face.

The warning comes in the aftermath of a flurry of stock market trade tied to so-called “meme stocks,” such as GameStop, which have sparked a rise in cryptocurrencies.

Regulators found that few of those polled were willing to stay in the stock market for at least five years. Most were not prepared to withstand the expected short-term volatility.

High-risk investments are attracting new investors, partly due to social media and press coverage, according to the Financial Conduct Authority (FCA).

Younger investors are easily influenced by financial experts on platforms like Instagram and TikTok.

Investors Misunderstand FCA Regulation Risks

People who purchased forex or cryptocurrency (57 percent and 69%, respectively) wrongly assumed they were regulated by the FCA, according to a recent study. The lack of investor protection and the risk of losing all their money meant they were unaware of this.

This initiative aims to help novice investors avoid being “played” by using the internet and social media to reach them.

This year, there was a discussion about requiring training DVDs or an online exam for anyone interested in investing in higher-risk securities.

YouTube and social media have become more important sources of information for self-investors than traditional media outlets, according to the FCA. This shift encourages smart investing with FCA.

A rising number of people are straddling the line between gambling and investing.