Financial 'Facebooks'
Published: Saturday, January 24, 2015 at 9:58 p.m. Last Modified: Saturday, January 24, 2015 at 9:58 p.m.
MOUNTAIN VIEW, Calif | It's the Facebookification of financial investing.
From social networking platforms that allow young investors to follow each other's stock-picking mojo, to websites for first-timers hungry for a piece of the Silicon Valley venture capital pie, to mobile apps that let 20-something hipsters find equally hip financial planners, the millennial generation is embracing new tech tools to put their newfound wealth to work.
And while some experts worry that tech-obsessed newbies will repeat their elders' mistakes by following the virtual stock-picking herd, many others believe the furious pace of innovation in financial technology will fundamentally change the way this new generation of investors tries to make its money grow.
Instead of getting that hot stock tip from a friend on the golf course, then pondering and eventually calling a broker to buy shares the old-fashioned way, they can with a few clicks of a smartphone app instantly bring up a company's financial numbers and analysts' reports as well as advice from a sprawling network of fellow investors. And a recent study showed that millennials a group defined as people reaching adulthood around the year 2000 prefer using online tools to do their investing more than other age groups.
"A lot of people my age are hesitant about jumping into the markets just a few years after the recession," said investor Greg Thomas, 27, who works in accounting. "But more and more of us are using social media tools to swap tips, and it's nice to learn together. It almost feels like a classroom where you can share ideas with people your own age and together see what works and what doesn't."
Thomas' preferred go-to guide is called Tip'd Off.
The Bay Area social networking startup's website and soon-to-be-launched mobile app describes its platform as a place where investors of all levels of experience can gather to share tips and information, show off their own brokerage portfolios, and maybe even mimic those who seem to have a knack for picking winners.
CTO Ankush "Koosh" Saxena, who at 25 has already earned a master's degree in electrical engineering, interned at Stanford's linear accelerator and worked full-time at Lockheed, said Tip'd Off brings a sense of ease and transparency to millennials whose trust was shaken by the financial excesses and failings that spawned the Great Recession.
"We saw that millennials tended to be overly conservative," he said, "so we wanted to give them a tool to learn more about investing over a medium they were already comfortable with."
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Financial 'Facebooks'