PSYCHOLOGICAL IMPACT OF SOCIAL MEDIA ON INVESTOR CONFIDENCE

Abstract

The rise of social media has significantly transformed the investment landscape, influencing investor behavior and confidence. This study explores the psychological impact of social media on investor confidence, examining how social media platforms serve as a source of market information, investment sentiment, and decision-making guidance. Using a mixed-method approach that combines qualitative and quantitative data, this research analyzes how cognitive biases such as overconfidence, availability bias, and herd mentality shape investment decisions. Findings indicate that while social media can enhance investor awareness and confidence through real-time updates and expert opinions, it can also lead to impulsive decision-making and increased susceptibility to misinformation. The study highlights the need for financial literacy and critical thinking in evaluating social media-driven investment insights. The implications of this research extend to individual investors, financial institutions, and policymakers aiming to regulate the role of social media in financial markets.