Decoding the Strike of Social Media Information on Investment Decisions in Nepal

Abstract

Social media has transformed the ways we communicate and share information and interests. Platforms such as Facebook, TikTok, X, LinkedIn, Instagram, and YouTube have evolved beyond their primary social networking roles, becoming key authorities for real-time news, opinions, and trends. This shift has been based on the financial markets, where investors are increasingly turning to social media to inform their investment decisions. The study explored how social media information shapes investment decisions and analysed its impact on investor sentiment, market behaviour, and financial outcomes.

By adopting a quantitative approach and conducting a survey among three hundred ninety (n = 390) retail Nepalese investors, the study indicates that market forecasting and technical analysis are found as the primary drivers of investment decisions, followed by company announcements and economic indicators. Opinions from social media influencers have relatively less influence on investment behaviour of investors. Thus, social media information significantly affects investor behaviour, leading to both opportunities and challenges in the financial markets.

The results suggests that investors should continuously monitor their investment decisions and adjust their strategies as needed to ensure alignment with the key drivers of investment decisions. Regulatory bodies should monitor the influence of social media on investment decisions to ensure market transparency.