It seems that every week, there is a new fad on social media—a viral dance, a new challenge, some kind of silly trend. Most (though not all) are harmless, and are meant to be fun. But the same mentality of “trend chasing” should not be applied to financial planning and investing.

It seems that every few years there is another “thing” to throw your money at—a “get rich quick” scheme, a quirky new way to invest, a new tactic or approach to try. You might think you’re immune to such things, but advertisers and influencers can be good. They understand human psychology and can be experts in tapping into both our fears and curiosities. What if the stock market collapsed tomorrow? What if it’s smart to put all my money in precious metals or cryptocurrency? Maybe real estate investing is the best way to make money today.

Investment fads can be very tempting, especially when some people are making money by, say, buying up old Star Wars figurines or purchasing NFTs. However, anything that’s relatively new, untested, or lacking long-term evidence for sustainability and growth is a big risk.

Take cryptocurrency, for example. Since the early 2010s, tens of thousands of cryptocurrencies have been introduced to the market, and many of them have failed (sometimes several hundred in a single year). Just about anyone can start their own cryptocurrency, and if the market agrees it is legitimate legal tender, it has a chance of succeeding. However, that’s a big “if,” and there’s a chance that the people behind the currency are corrupt or simply are terrible bookkeepers (as was the case in the FTX collapse). In truth, cryptocurrency is always a risky investment because it does not represent anything tangible. There is no clearcut or logical way to value it.

Still, I understand the allure of trends. Finding a golden ticket—a shortcut to getting rich—is everyone’s dream. It’s the basis of movies, magazine articles, and entire social media accounts. Because of the pervasiveness of this message, we start to think, “Maybe I could be one of the lucky ones too. Maybe I need to take a gamble.” But that’s what risky, unproven “investment” approaches are: a gamble. And the thing about gambling is that “the house” almost always wins, not the individual.

Instead of jumping on the latest investment or financial planning fad, I encourage you to opt for more tried and true methods. Slow down, think critically before making any investment changes, and consult your financial advisor. As boring as they sound, the old, tried-and-true financial planning and investment approaches work. These include:

  • Diversifying (creating an investment blend of securities, mutual funds, and more that can weather the ups and downs of the market)
  • Taking a Long-Term Approach (read my past blog post on this topic)
  • Creating an Emergency Fund (that you can quickly access)
  • Regularly Contributing to Your Investments
  • Rebalancing Your Portfolio (when necessary and with the help of a trusted financial advisor)
  • Engaging in Smart Estate Planning
  • Working Alongside a Trusted Financial Advisor

Though investment trends can seem like a great way to quickly make money, they can be incredibly risky. Next time you’re tempted to pour your money into an investment fad, take a step back and give it a good, long thought. Are you playing with money that you can afford to lose? What could be the consequences of your decision? Is it really worth the risk? Take it from a financial advisor: these fads are usually not worth it, and sticking to proven (though boring!) investment approaches is almost always the right decision.

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