Investments influenced by the Influencers

In 2020, a Stone-age phrase, “The Internet era has brought us to the world of endless possibilities” is still proving its statement day by day with an introduction to inventions and new p(f)aces.

This has a direct connection with many areas that were upgraded and downgraded from their statuses. One such direct hit was made on people called Stars. Earlier the times of the internet, Stars are people who got their fame (only) in movies. Later, television brought that down with more opportunities and staged more people. Now, with the internet in hand, wherever people stand with talent and consistency is the stage, and those who are doing it are Stars. In modern terms, Influencers.

Life of social media influencers

Unlike Stars, Influencers will have a soft corner in our mind by displaying a non-intimidating lifestyle. Even the stars will have a normal one but, only influencers make it visible through their frequent (often, daily) appearances. And, they are helping in making stars to be casual instead of maintaining a designer lifestyle everywhere they go.

Influencers are no less than celebrities but, they don’t pop the hype in us like celebrities when we see them. This isn’t hated or dislike, but a connection we made with them through:

1. Seeing them in person and letting them access our time (like a one-to-one interaction).

2. Interactions with them (as Q&As and comments), unlike TV shows and Movies.

Though both are virtual and won’t pop even an idea about us, we get a sense of satisfaction, and pleasure, while they respond to our activities. It will make us feel closer to them.

Normal things like Liking, replying to our comments, mentioning us, and everything involving the audience to their traffic generating strategy, will make the audience to go crazy for them. To the audience, it is like they are staged in front of all the followers, and for a fact, they are the center of attention. This results in a large amount of Dopamine secretion. Though the feeling is delusional, it will make people feel close to them.

Based on these strategies, marketing companies sponsoring them and encouraging them to explore their products are common, and we knew it. On the other hand, have you ever noticed about the things they use in their day-to-day activities getting prioritized in our Wishlist? And it slowly becomes our fashion? (even things that are not sponsored or promoted).

The movie & television stars will infiltrate in us too but, not to the level of influencers. This way, an unconscious marketing role is played by them every day.

Role of Influencers in Marketing

We feel close to our influencers, would start to copy-paste their behaviors at some point, if we feel like it’s not up to the standard. The standards will be based on them.

Copying their lifestyle and attire in our life is easy, and it won’t trap us much in paralleling their way. But following them abruptly will craft our mind based on their interests and ideas, and it is terrible are an investor. Even the influencers based on investments may fail us based on several criteria.

Not every influencer is an investment advisor. Some follow their influencers and grabs the idea (knowingly or unknowingly seeded on them) as a copy. The same problem occurs with us too.

The investment ideas from the influencers mostly depend on their field of income (that’s a good side for them to play the game but not for their followers). There are many barricades to their idea like the place they are living in, type of returns, and taxation.

For example, in modern times, entertainment-based influencers are on the rise like sports activities, YouTube, Instagram, snap, etc. let’s take the common platform everywhere in the world like YouTube. Regardless of the country, every YouTube star depends on gadgets for their day-to-day activities. It’ll become their primary focus. If someone follows one keenly, they’ll end up preferring for the electronics.

If someone’s influencer is on Instagram, then the prime focus will be on cosmetics and apparel. Some influencers are travelers, and tourists, and will make their interest in automobiles which will wind us up with thoughts about super cars and bikes based on non-renewable energies and dumps the idea of future resources or making an investment on trial versions without analyzing the effects.

This is a boon in countries without any restriction towards the interest. But not everywhere!

In the cases of Investment advisors (in our influencers list), they try to blend in with the possibilities (mostly probabilities) of the source they are investing on.

Impact of Influencers

The upcoming times of human beings are far easier in terms of bodywork. Considering the mind work, AI will stretch its hand and grant us more time to spare. Eventually leading to the demand of Entertainers and Informants (later transferred to influencers).

The consumption of the internet has increased in the last 5 years which in turn hiked the prices of social media and service platforms like Amazon (AMZN), Facebook (FB), and Google (GOOGL) to reach new heights at their stock prices.

People wouldn’t be surprised as many have predicted it by the change in trend but, do you know that Influencers played a major role in the downfall of competitors like eBay (EBAY), Twitter (TWTR), and Canon (CA)?

Lets throwback at the history of APPLE (AAPL) and Sony (SNE) over Android and Canon.

Initially, with a cheaper price and being user-friendly, the trend must have gone with Android and Canon to the top in mobile preferences and camcorder respectively. But the trend followed on Apple and Sony which is neither cheap nor user-friendly comparing to those earlier.

This trend was initially created by the stars like the regular expensive things they carry around. Later, influencers starting to use these and explaining the facilities (not with much difference though), people prefer to go for those in hands of influencers than the better options available in the market with lower price tags.

Through this mentality, people started choosing markets that are popular in the first place. Also, this trend being obsessed with technology made tech markets to surpass most of the other resources available with better returns and better future (mentioning the absence of toxic E-waste).

The mindset of the automobile industry has already moved to E-Industry. Considering the production values and the waste management, it is clear that, in the next decade, the E-auto-mobile industry will face its decline and the non-renewable car industry will have a steady market despite the recent trend in decline, as the European bank forecasts from its analysis.

[https://www.businessinsider.in/slideshows/miscellaneous/here-are-one-banks-10-outrageous-predictions-that-could-shake-markets-in-2020/4-oil-and-gas-companies-outperform-clean-energy/slideshow/72372882.cms]

But the thoughts on Industry have made companies like Tesla (TSLA) reach its heights and will still move forward. The change in trends and analysis based on influencers will have its impact and it will make us blind in certain directions.

Influencer’s Psychology

The mindset of influencers is a bit unstable. Unlike celebrity stars, there’ll not be a steady state of stardom in their life and it levitates their balance often. In enduring times, their focus will be on getting the things done through sponsors and gathering more audience.

Once it is established, they will be in the beginning stage of the stardom. While pursuing it, they would be inconsistent with the revenue generated. So, this will make them go far trial and errors and sometimes hit by fluke. But this is a bad idea for those who are getting influenced by them

Why Influencers are bad on Investment?

We could be experts and well versed in analyzing the markets but, the attitude of following the influencers will subconsciously make us go loose especially if the influencers are on the field of investing.

It’s a simple psychological factor. Consider your phone as a product you once wished to have and now it’s in your hands. If you love the experience, you’ll keep on going into it and prefer to withhold it anytime possible. This is due to 2 main reasons:

1. It always captured your eyes and

2. You love what it delivers.

So, next time you want to upgrade it, you will do it without a second thought. This is the exact scenario with influencers. Their way of life and things they use will always be in our eyesight. And if we love it, considering the negativities in it will be hard for anyone.

It pushes into zones by accidents and one time passes on things we get admired too. This trap of getting us into things on investment will make our analysis on investment a naive one and puts us in situations we never wanted to.

If you want to hunch in your investments, get the ideas, refer the flows and predict the outcomes. If you couldn’t predict the outcomes or the outcomes seems irrelevant to the future market ideas (from your perspective), just skip those. Else, the returns will be on the side of luck or lessons in the way to not invest (like Warren Buffet says).

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Kishore Vishwa

Kishore Vishwa

Focusing on social-issues and the psychology behind.