According to a recent report from the Financial Industry Regulatory Authority (FINRA), 61% of social media users and "finfluencer" followers aged 18 to 34 have made an investment decision based on recommendations from a social media personality -- and these folks also reported "substantially higher fraud exposure and victimization."
A lot of financial advice found on social media is worth what you paid for it -- nothing. Here's a look at several bits of advice I've run across that are simply wrong or misleading.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
One social media pontificator said: "The stock market is one of the best tools to grow your wealth." That's very true. Over decades, it beats most other alternatives. They added that a 10% return doubles your money every 7.2 years, and a 20% return doubles your money every 3.6 years. That, too, is true -- it's the classic "Rule of 72."
The problem, though, is the suggestion that you can expect stock market returns of 20% annually. The stock market has averaged annual returns of close to 10% over many decades, not 20%. There are some years with massive gains, and some with sharp drops. But overall, expectations should be tempered.
#advice
A lot of financial advice found on social media is worth what you paid for it -- nothing. Here's a look at several bits of advice I've run across that are simply wrong or misleading.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
One social media pontificator said: "The stock market is one of the best tools to grow your wealth." That's very true. Over decades, it beats most other alternatives. They added that a 10% return doubles your money every 7.2 years, and a 20% return doubles your money every 3.6 years. That, too, is true -- it's the classic "Rule of 72."
The problem, though, is the suggestion that you can expect stock market returns of 20% annually. The stock market has averaged annual returns of close to 10% over many decades, not 20%. There are some years with massive gains, and some with sharp drops. But overall, expectations should be tempered.
#advice
2 months ago
