The TikTok video titled “6 Stocks for 2024! Part one,” shared by @overlookedalpha, gained significant traction by presenting bullish cases for three specific stocks: Take-Two Interactive Software Inc., Alphabet Inc., and Zillow. According to the video’s recommendations, investing $1,000 in each of these stocks would have yielded a modest profit of approximately $170. However, the performance diverged among the picks, with Alphabet standing out with a robust year-to-date gain of 33.5%. In contrast, Take-Two saw a slight decline of 4%, and Zillow experienced a more significant drop of 12.5% during the same period in 2024.
Despite the varied outcomes, “6 Stocks for 2024! Part one” became a standout on FinTok (Financial TikTok), amassing 7.4 million views and exemplifying how investment advice can capture a broad audience, even when its accuracy or quality may be questioned.
Analyzing data from BestBrokers, which reviewed the top 20 most-watched TikTok videos from 2023 predicting stocks or ETFs for 2024, revealed that a majority—64.37%—of the 87 securities highlighted in these videos were profitable by mid-year. This statistic, while favorable, needs to be contextualized against the backdrop of a bullish U.S. stock market performance in early 2024, where the S&P 500 surged nearly 18% and the Nasdaq Composite soared over 22% year-to-date.
The report underscored the notion that picking stocks during a bull market can seem deceptively straightforward. Many investors might have fared better by simply investing in broad-based index-tracking ETFs, which mirrored the robust performance of equity indexes throughout the year.
The influence of social media, particularly TikTok, on younger investors is profound. A survey by Nasdaq highlighted that a significant majority of Gen Z and millennial investors turn to social media platforms for investment insights. While this democratizes access to financial information, it also exposes investors to potential misinformation and speculative stock tips.
Eric Dahan, CEO of Mighty Joy, cautioned against the pitfalls of social validation in investment decisions. He emphasized the need for skepticism when evaluating investment advice on platforms where creators leverage past successes to promote stocks, potentially influencing inexperienced investors.
In conclusion, while TikTok and other social media platforms offer unique perspectives and access to diverse investment ideas, prudent investors should approach such recommendations critically. Making informed financial decisions requires thorough research, understanding market dynamics, and considering individual financial goals, rather than relying solely on viral trends or social media influencers for guidance.