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NEW YORK (MainStreet)—Decades ago, if you wanted to invest, you'd have to call your broker, check your stock tickers in the morning newspaper and hope all goes well. The internet has changed the process of acquiring financial information in a very fundamental way, from financial analysis available to the masses to by-the-minute updates on the market.

But these changes aren't just about changing tools—they influence our psyche around money management. On Wednesday, Internet Week New York tackled this issue in a panel that included Rachel Fox, a 16-year-old actress who has appeared on "Desperate Housewives" ... and is a successful day trader. It also included Stephanie Grayson, the Social Media Editor at Yahoo! Finance, and Bruce Kamich, Adjunct Professor of Finance at Baruch College.

The Internet and Social Media Are Changing How People Invest

"Things move so much faster now," said Kamich. "When I was Rachel's age and trading my bar mitzvah money, everybody was accessing their investments by phone."

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Yet, he said that one thing that remains the same is that information is a commodity. "Soros is quietly buying a stock like J.C. Penney, and we still don't know until the news is announced, unless we're meticulously following movement of that stock ourselves," Kamich said. "Information travels faster, but the old sayings that have been around for 100 years still work."

In many ways, Fox is the poster child for the new age of investing. Both of her parents always felt strongly about finance and taught her about money from a young age. She fell in love with the concept of day trading, she said, and proved to her parents that she would be capable of managing real money by first starting a virtual portfolio where she could play with positions. When they saw that she managed it responsibly, they gave her permission to open an account with real money. In 2012, she made a 30% return on 338 trades.

"I trade online from my computer and also from my iPhone," she said. "So when I'm busy on set or playing with my band, I'm on my iPhone looking at stocks, trading, short-selling." Although her interest in investing at such a young age is not indicative of a sweeping demographic change, she did say that many of her friends are curious to learn more about what she does with her money. (That's what led her to start her own investing site,

Investing for the Younger Generation

Kamich said that the younger generation isn't universally more comfortable with a quick-moving stock market and algorithmic trading. "Some people shy away from speed and some embrace it," he said.

The real impact may be social networks. Millennials have the highest social networking penetration of any generation, according to the panel's moderator Lauren Lyster, a reporter and anchorwoman. Grayson says that Twitter may be one of the most important social platforms for investing because it allows investors to watch stocks in real-time. Grayson pointed to a Marketwire statistic saying that 60% of people under age 40 regularly consult social media for investment purposes.

According to a Wells Fargo survey, 36% of Millennials still look to their family for financial advice, while 15% go online and 17% ask investment professionals.

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"People used to have a lot of barriers and gatekeepers when they needed info," Grayson said. "Even if they knew what they were looking for, it was not so easy to find. Now, you're just a search or Twitter hashtag away." So, although 15% may sound like a low percentage of Millennials going online for financial information, Grayson points out that financial professionals and the internet are neck and neck in competing for Millennials' financial attention.

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Although the online shift is more visible in younger generations, Fox noted that the transition isn't exclusively among young people. "I've had people in their 60s on my website," she said. "I got an email from a guy in his 50s who owns a restaurant chain and doesn't understand enough about the stock market. He was reading my site, seeing how I play in a band, that I know how to manage my finances even while living this busy life, and it has inspired him to take control in his own busy life."

Lyster noted that investors who lost out in 2008 may be relearning how to plan for their future.

Of course, there are issues with depending on an open network for decisions that can impact millions or even billions of dollars (like the flash crash based on an inaccurate Associated Press tweet stating that the president had been injured).

Despite the younger generation's increased trust of the internet as an information source, Fox says that people in her generation are just as discerning when deciding what information is reliable.

Another way that Millennials' perspectives differ is that they are dealing with the harsh realities forecast for the job market for them. "As people are remaining in the workplace longer, there are fewer jobs opening as others leave," Grayson said. "There are other factors you might expect, too, like debt from college." This has the potential to change the way young people view investing, such as turning to the stock market for income when the job market is rough.

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Kamich said students often go to different extremes to deal with harsh job prospects and the lessons learned from watching their parents lose money or even homes in the 2008 crash. Although his students' demographic at Baruch College is a bit different (most are first generation college students and English is the second language for many), he said that the reaction to the economy can be split: "Some students are risk averse, while others embrace risk and try to buy penny stocks and flip them."

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Challenges Ahead

Kamich thinks the biggest challenge to Gen Y's ability to become successful investors will be discipline. "We have speed, access, information, but they're never going to learn discipline on the internet," he said. "That can be the discipline to put money away each month or week. Also, when you can trade your account very rapidly, you have to have the discipline not to trade too much."

Although many of these are challenges investors have always faced, Kamich thinks technology makes them more difficult. For example, if you want to pursue a certain strategy, it's just that easy to look for a message on a bulletin board to validate why you should stay with your losing position.

Fox sees the biggest challenge and greatest benefit as acquiring a financial education. "It's difficult to weed through to find the right education," she said. "Online, there's just so much info." She also said that, to some extent, finance simply isn't cool enough: "It's all about hype these days."

Fox thinks it's important for finance to become more accessible so it's less daunting for her social set. "You turn on CNBC, and these guys are so brilliant, saying such brilliant things, but people in my generation get lost and scared," she said. Fox thinks more and more people will go online to learn about investing in the future, and that too many people simply don't know that these tools exist, or where online to look: "I think we have to make people aware, and then I think it will grow by leaps and bounds."

--Written by Allison Kade in for MainStreet

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