Don’t want a Lamborghini or to become a millionaire from the sofa, and no, it’s not the end of the world as we know it.
I’ve been wanting to make this post for a while now, but there has always been a reason to postpone it. We’re heading for the end of the month, which means the next post will be about the portfolio growth and the trajectory of the $UK100, so it’s the right time to take this stone off my shoe.
As you know, we live in an age when our AI-driven algorithmic overlords know us better than we know ourselves. If, like me, you spend a sufficient amount of time on the eToro platform, on finance, tax, or other investment sites, your cookie storage will light up like a Christmas tree for all search engines out there aiming to offer trading or tax optimisation schemes.
Don’t get me wrong; two or three times in my life, I must have been grateful to advertisements for bringing to my attention something I needed and did not know existed. Still, in the other 99.9% of the cases, I see advertisements as a tool used by someone that wants me to buy something that is worth less than it is advertised for. After all, quality advertises itself, doesn’t it?
Specifically, there are two things that I resent and that seem to form the bulk of the advertisements I get put in front of me: get-rich-quick schemes and financial apocalypse warnings.
The second ones, which I admit are employed sometimes even by some of the people I follow and respect, tend to be just a device to get you to view content, and are often an imposition placed upon content producers by a mixture of our evolutionarily conditioned implicit bias for warning signs, and the way ranking algorithms offer content to users. They end up being less apocalyptic than what they seem in the title and thumbnail, and quickly move to a more balanced view of the financial outlook. Still, to the untrained viewer, they can offer an opportunity to activate the limbic system while sedating the prefrontal cortex, in lay terms, making you think and act based on emotions rather than reason. Entire channels of communication built on impending doom are as dangerous as the channels built on insane market optimism. They can lead traders or investors to sink all their resources into leveraged one-directional gambles that very often are responsible for the collapse of portfolios.
The advice I’d like to offer is: consume in moderation; if you buy into an extreme reading of reality, skeptically search for arguments that disprove it, and above all, if you feel too aroused by what you’re hearing or seeing, remember that those are your emotions behind the wheel, so it might be time to stop and swap drivers, letting boring and cool reason take over for a while.
While there might be some saving grace for doom mongers, there is none for the Lamborghini-driving experts who make a million dollars by 9:15 in the morning and spend the rest of the day shooting pheasants, getting buff in the gym, or sipping piña coladas by the side of a pool. In my personal opinion, which I might add is not a majority opinion, trading is neither “rocket science” nor “brain surgery,”* but it contains some aspects of both. Like a rocket scientist, you have to have a solid grounding in what you’re dealing with, or your ship will quickly burn after takeoff. I know this as I narrowly escaped this destiny in the first eight months of my eToro career. Like a brain surgeon, you must keep calm under stressful conditions, or you might find yourself chopping off the wrong piece of the brain, ending up on the other side of a trading session with a portfolio where the weeds are healthy and the fruit-bearing branches are all chopped. That, and patience, are what you need, not an x-hundred dollar course that teaches how to make money from nothing. In fact, it is my contention that the aforementioned x-hundred dollar course is not only the safest but also the quickest route to disappointment.
Not sure how this mini-rant resonates with you, but I’ve been thinking about it for a while, and I’m pleased I got it off my chest. I hope it gives you some food for thought, and by all means, if your experience is different from mine, let me know. We skeptics thrive on validating or disproving our arguments with outside contributions! 😁
*For those outside the British Isles, rocket scientists and brain surgeons are the very yardsticks in the measure of complexity handling. In my modest opinion, this reflects a too engineer-centric view of the world, and I would find it more compelling to talk about “quantum physicists” and “meaning of life philosophers”, but there you go. Perhaps it might be fun if you could contribute in the comments to what your culture’s declination of the “rocket scientist” concept is.
P.S. I managed to close the $AMZN (Amazon.com Inc) trade in the green, one less problem for the rebalancing engine 😉