Wealth Compass
Dear Reader,
In the Army, no report from the field is ever acted upon the moment it arrives. Who sent it. How do they know. What would make it wrong. Only after it survives that questioning does it become intelligence you can act on. Everything before that is just a rumour with good posture.
On WhatsApp and Instagram, that discipline does not exist. A message arrives. It is urgent, dramatic, and impossible to verify in the ten seconds you have to read it before your thumb moves to forward it. By the time anyone checks, it has already reached a thousand phones and quietly reshaped a thousand decisions.
This week I want to talk about that gap. Not the gap between truth and lies, that has always existed. The gap between how fast a financial lie travels and how slowly the correction ever catches up to it.
It turns out this is not really about technology. It is about attention, emotion, and incentive, three very old human weaknesses that social media has simply learned to exploit faster than anyone before it.
Why Financial Lies Spread Faster Than Financial Truth.
In 2018, researchers at MIT published a landmark study in the journal Science. They analysed 126,000 news cascades on Twitter between 2006 and 2017, tracking how true and false stories spread. The finding was stark. False stories were found to reach far more people, far faster, and far more deeply than true ones. The effect was most pronounced for political news, but financial information was among the categories studied, and the pattern held across all of them.
The reason false information travels faster is not that people are foolish. It is that false information tends to be more novel, more emotionally charged, and more surprising than true information. A message saying “this fund has returned 12% over ten years through disciplined SIP investing” is accurate but unremarkable. A message saying “this strategy made Rs 7.5 lakh in a single day” is neither accurate nor responsible. But it is remarkable. And remarkable things get shared.
A separate body of research published in Nature Human Behaviour found that the spread of misinformation is driven less by deliberate deception than by inattention. People share things they have not fully read, have not verified, and have not thought carefully about. The lie does not need a conspiracy behind it. It only needs a moment of inattention from a large enough number of people.
In financial markets, this dynamic has consequences that are measurable in rupees.
India now has one of the largest and fastest-growing populations of financial content consumers in the world. YouTube, Instagram, Telegram, and WhatsApp have created an ecosystem where financial advice, market predictions, and investment tips reach crores of people daily. Most of it is unregulated. Much of it is wrong. Some of it is deliberately designed to mislead.
SEBI’s Investor Survey 2025 found that 56% of investors follow finfluencers, people who provide financial content on social media. Of those, 62% said they had made investment decisions based on finfluencer recommendations. 93% described finfluencers as credible. YouTube was the primary platform for 91% of respondents.
Of the thousands of finfluencers operating in India today, just 2% are formally registered with SEBI or AMFI to give investment advice. The remaining 98% are operating without regulatory oversight, without fiduciary responsibility, and without any accountability for the outcomes of the advice they give. Most of them have a financial interest in the products or positions they are recommending, an interest they are not required to disclose.
Roughly a third of active finfluencers give stock-specific recommendations. These recommendations move prices, create concentrated positions in illiquid stocks, and then often collapse, leaving retail investors holding losses while early movers have already exited.
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This is not unique to India. The same pattern is playing out across every market where social media and investing have intersected.
In the United States, the Federal Trade Commission reported that Americans lost $2.1 billion to social media investment scams in 2025, an eightfold increase since 2020. Investment scams were the single largest category, accounting for $1.1 billion of the total. The median individual loss was $3,000, but losses above $100,000 were not uncommon.
In the United Kingdom, the Financial Conduct Authority amended or withdrew 19,766 financial promotions in 2024, a 97.5% increase from the year before. Twenty finfluencers were interviewed under caution using criminal powers in a single enforcement push that year.
A 2026 FINRA Foundation study found that among 18 to 34-year-olds who primarily get financial information from social media, the average score on a financial literacy quiz was 42%. Yet 63% of the same group rated themselves as having above-average financial knowledge. The confidence is inversely correlated with the accuracy.
Financial misinformation is not primarily a problem of intelligence. Educated, experienced, financially literate people fall for it regularly. Understanding why is more useful than assuming it cannot happen to you.
The first reason is social proof. When a financial tip arrives through a trusted contact, a colleague, a family member, a friend in the same profession. It carries credibility it has not earned. The trust in the relationship transfers to the claim. This is not a flaw in human reasoning. It is how trust is supposed to work. Misinformation exploits it.
The second reason is urgency. Genuine investment opportunities do not expire in 48 hours. Manufactured ones always do. The artificial deadline is specifically designed to prevent the one thing that would expose the lie. Time to think.
The third reason is novelty. A CFP Board survey in 2025 found that three in four people search for financial information online, but fewer than two in five believe the information they find is in their best interests. And yet the search continues, driven by the hope that somewhere in the noise is an insight that everyone else has missed. That hope is what financial misinformation is specifically designed to exploit.
The lie does not need to be convincing to everyone. It only needs to reach enough people during a moment of inattention, aspiration, or anxiety. And in 2026, those moments arrive constantly, on every device, at every hour.
Before you act on any tip, check whether the source is actually authorised to give it.
People authorised to give investment advice or help you with your mutual fund investments are registered with SEBI/AMFI. Both registrations are publicly verifiable on their respective websites in under a minute. If the person giving you a tip cannot be verified on either, treat the claim as entertainment, not advice, however confident it sounds.
Give every urgent financial claim 24 hours before you act on it.
Urgency is the tell. Genuine opportunities can survive a day of scrutiny. Schemes designed to bypass your judgement usually cannot.
Before forwarding a tip, ask who actually benefits if you believe it.
If the answer is an unregistered promoter, an anonymous group admin, or someone already holding the position they are urging you to buy, that alone tells you most of what you need to know.
SEBI Is Tightening the Rules on Finfluencers. Here Is What Is Changing.
SEBI has been progressively tightening its framework around unregistered financial influencers. The regulator has issued guidelines requiring registered entities to not associate with unregistered finfluencers, and has begun enforcement action against influencers who give specific stock recommendations without registration. The direction of travel is clear: the era of consequence-free financial content is ending.
For investors, the practical implication is simple. Any financial content creator who is not registered with SEBI or AMFI is operating outside the regulatory framework. Their content may be engaging, their track record claims may be compelling, and their confidence may be persuasive. None of that changes the fact that they have no regulatory accountability for the outcomes of their advice.
The action this week. Check whether the financial content you consume regularly comes from a SEBI or AMFI registered source. If it does not, that does not mean it is wrong. It means there is no accountability if it is.
The Rs 2.1 Lakh Crore Question. What Social Media Scams Are Actually Costing Investors.
The US FTC’s finding that Americans lost $2.1 billion to social media investment scams in 2025 points to a pattern that is playing out in India as well. The SEBI investor survey found that 62% of investors who follow finfluencers made investment decisions based on their recommendations. The intersection of high follower counts, unverified track records, and specific stock calls is the highest-risk point in the retail investor’s information environment.
The most common pattern: a finfluencer builds a following by sharing broadly accurate general content, establishes credibility over months, and then introduces specific stock recommendations. By the time the stock recommendation arrives, the audience’s trust has been earned on content that did not require accuracy to build it.
The action this week. Separate the financial educators you follow from the financial advisors you trust. The first can be anyone. The second must be registered.
The Market Is Correcting. How to Navigate the Ongoing Correction.
Indian markets have been under pressure. The Nifty 50 and BSE Sensex have corrected meaningfully from their lifetime highs, and the broader market has seen many quality stocks fall 25 to 60%. FII selling, global uncertainty, and valuation concerns have all played a role. For many investors, especially those who entered in the last two years, this is the first significant test of their conviction.
Why does this feel so uncomfortable? We have all been on a rollercoaster. Going up feels exciting. Going down triggers fear. The human brain is not wired to handle falling numbers calmly. When markets fall, the mind does exactly what it is designed to do. It tries to remove the source of discomfort. And in investing, that means selling.
And here is what happens after the panic sell. Once we have exited and booked what were otherwise notional losses, we feel a sigh of relief. But we have also locked in a real loss, and stepped off the train just before it was about to recover.
The action this week. If you stopped or reduced your SIP during the correction, restart it at the original amount. If you did not stop it, do nothing. That discipline is worth more than any tactical adjustment right now.
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