The future of social investing evolving!
By Ken Mooso
Many fail to comprehend that the world of social investing did not originate with the Wall Street Bets craze or the COVID lockdowns, which saw tens of millions of individuals diving into it due to having nothing else to occupy their time. Instead, it initially emerged from the financial crisis of 2008. Startups like Robinhood and Wealthfront originally began as, or at some point, transformed into social investing platforms where people could learn, share, and follow one another. For PersonaFi and our founders, the consensus was that the timing was not right back then.
Now, with the widespread adoption of mobile phones and the willingness to share what was once considered private and sacred, the landscape has changed significantly. As the founder, when we asked retail investors about their research methods, an overwhelming majority mentioned that they relied on advice from their friends. This evolved from a Facebook group of nearly 30,000 members sharing trades, portfolios, and analyses to a mobile application available on both iOS and Android.
However, despite experiencing success in certain areas, we quickly identified flaws in our thesis. We consistently encountered the issue where the most vocal and active social media personalities dominated subscriptions. Surprisingly, there was little correlation between the number of subscribers and the performance of creators, but rather a stronger connection between creator engagement and the broader stock market's performance. With high correlation to overall indices, it was no surprise that subscriptions and engagement plummeted alongside the market, entering bear territory and arguably an economic recession in 2023.
Now that COVID and lockdowns are no longer hindrances, life has largely returned to normal for most people. They are no longer confined to their homes, watching CNBC from 9 to 5, staying up until 2 am to monitor the futures market, or trading with friends online while sipping white claws. Consequently, as a team, we found ourselves questioning whether this was a sustainable business model and whether it truly served our customers' best interests.
Collectively, we remained steadfast in our belief that the future of investing and personal finance would remain social. Reflecting on our challenges and triumphs, one major success stood out - the desire for community and a shared interest in prosperity. Consequently, we felt that the stock market was too narrow in scope, and we needed to incorporate various aspects of personal finance, from buying a first home to banking, savings, credit, and, of course, investing.
As we transitioned our company into a social stock trading platform, we transformed into a community that shares wisdom through stories and lessons encompassing all facets of personal finance. Since this pivot, we have established partnerships with Vinovest, Tykr, and Acorns, with more on the horizon. These companies align with our vision of delivering exceptional educational content to help our community achieve their financial objectives.
We invite you to explore our latest platform and enjoy the journey with us. We are thrilled about the prospects for this year and beyond.