People are always selling something, whether it’s years of expertise or a new idea. Social media has given them a voice and influence, and now it’s easy to find all sorts of financial advice on social media. Unfortunately, much of it is garbage.
The FinTwit (financial Twitter) community is well established, but sound advice is often overshadowed by those who just want attention. You can drop a juicy piece of info to your followers on Twitter that is completely fake and many will buy it. It’s not just Twitter, by the way. Facebook, Instagram, and LinkedIn are also plagued by poor or downright deceitful advice.
Far too many traders have been led astray by charlatans trying to make a name for themselves. You might look at their experience (bio) and think, they know what they’re talking about. But like anything in life, take your time and do your research – don’t just take someone else’s word for it. Even (or especially) if it’s free.
How to manage financial advice on social media
Steer clear of preachers
Some guy who spent 25 years at Goldman Sachs may have an impressive bio, but he probably doesn’t know much more about current market conditions and trends than you. If he’s preaching advice like it’s gospel, research and verify on your own.
Beware the carnival barker
He’s noisy, he uses a lot of caps lock and exclamation points, and he will pound you into the ground with his ideas. Once in a while he’s right, but most of the time, he’s wrong.
Consider the value of the advice
If you’re paying for advice – through a newsletter or chat room – is it helping you as a trader? Are you avoiding heavy losses in this relentless bear market? Are you finding wins in unexpected places? Look at your portfolio results and decide if it’s worth listening to that person anymore.
Trust but verify
There are a lot of great traders out there who offer valuable advice – paid and free. Even great traders make mistakes, so always verify what they say – the chart/technicals won’t lie to you.
Find your guides
The traders who are quiet and focused often deliver the best advice and outcomes. They are out there – you just need to find them.
