Learn from TikTok, Lose in the Stock Market: The Dangers of Social Media Trend-Based Investing

The IHSG fell 0.56% despite a 30.37% surge in daily trading volume due to high speculation from new retail investors in the market. Over 20.32 million new investors, predominantly under 40 years old, access the market via mobile applications. Lack of financial literacy and reliance on social media trends leave novice investors vulnerable to significant financial losses. Indonesian capital markets are facing contradictory trends. On one hand, the Indonesia Stock Exchange Index (IHSG) closed last week with a disappointing 0.56% correction to 6,127.3. On the other hand, daily trading activity surged by 30.37% to Rp28.38 trillion. This massive capital movement in the secondary market, however, does not necessarily reflect mature strategies but is blamed on speculative activity driven by social media trends. According to BEI Company Secretary Kautsar Primadi Nurahmad, trading data from 25 to 29 May 2026 showed varying movements. When daily trading volume and frequency declined alongside foreign investors’ net selling of Rp8.519 trillion in a single day, the domestic market remained flooded with capital from new retail investors. The surge in participation is evident from cumulative data as of December 2025. The number of Single Investor Identification (SID) accounts in the capital market jumped to 20.32 million, with 8.59 million being active stock instruments accounts. Interestingly, the Financial Services Authority (OJK) also reported that digital asset or cryptocurrency investors reached 20.19 million during the same period. The demographics of these new market participants are specific: over 54% are under 30 years old, and 25% are aged 31 to 40. The rise of mobile-based investment platforms offering easy digital registration, combined with the proliferation of short educational content on social media, has driven the emergence of millions of young investors. Dangers Lurk Behind Inclusion Without Literacy. The fundamental issue is no longer the number of people holding stock accounts, but the quality of knowledge underpinning their trading decisions. In the domestic stock market, less than 15% of retail investors fully understand and use fundamental analysis. Conversely, most beginners prefer technical analysis due to its visual nature and perceived immediacy. However, popular technical indicators such as moving averages or the Relative Strength Index (RSI) are often superficially understood without robust risk management knowledge. This situation is exacerbated by the fact that over half of new investors entered the market due to external pressures. Unofficial recommendations in WhatsApp groups, short TikTok reviews, and trending topics on social media platform X often serve as the primary basis for asset purchases. Without independent analysis of company financial reports, this trend-driven investor group is most vulnerable to panic selling when market directions suddenly turn downward.