Smart Thinking On Investing – August 19
Smart Thinking On Investing – August 19
Social Media Influencing Millennials to Spend More
- Apps such as Instagram, Snapchat, and Facebook are conditioning peer comparison, and millennials are feeling the need to “keep up with the Joneses”
- At least 15% of millennials have admitted to spending money to look good to their friends on social media
- Good news though too, a large number (80%) are also saving and budgeting, with a view to paving out a financially stable future for themselves
Stock Market Investing Risks
- Volatility: All equities are at the mercy of market risks and uncontrollable events such as geopolitical events (Brexit), economic events, and inflation
- Timing: Trying to perfect the adage “buy low and sell high” is incredibly risky and will likely result in losses rather than increased returns
- Overconfidence: Riding high after stock market success is a terrible time to make sound decisions; far better to act with calm and logic for results
How to Avoid Uncompensated Risk
- High risk = high returns, right? But you gotta know the difference between compensated risk and uncompensated risk
- An example of the first is investing in equities instead of putting your money away in savings; the potential return is higher but you take on stock associated risk
- An example of the second is concentrating your investments in just one sector, industry or stock rather than diversifying your portfolio to spread the level of risk out
Why Aren’t Millennials Investing?
- The stock market crash of 2008 had a major impact demonstrating the risk of investing, and they’re up to their eyeballs in student loan debt on top of that
- It’s a confusing world to try and enter and just not accessible enough to those in the millennial generation
- They find financial apps more trustworthy than approaching a regular broker—a great avenue to choose if you’re nervous but want to begin investing!
Just How Successful Are Stock-Picking Cats?
- Two kittens—Macy and Mattox—were offered a choice of 24 well-known shares from the S&P 500 index laid out over a Twister game mat
- As they interacted with the choices the stocks were then purchased on a stimulated trading platform; in just one hour of ‘trading’ they gamboled away with a total loss of $500 between them
- In real trading they would also have stacked up to $220 in fees, so sure the returns are appealing but it’s safer to invest in a low-cost index fund to gain the most benefits
Do you want to start investing on your own, but don’t know how?
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DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article. Andrew Stotz doesn’t necessarily endorse any stocks or shares mentioned in the articles or the author of such articles linked to and summarized in Smart Thinking On Investing and cannot guarantee the accuracy of its information.