Last month a bold and concerning prediction showed up in popular social media feeds:
“Sell Your Stocks and Move Your Money
Before May 2nd, or You May Never Recover”1
Reading such a bold and dreadful prediction can cause investors to get concerned, fearful, and may tempt them to “get to safety” by moving to cash.
Thinking About Predictions
Whenever we feel anything about investments, it is important that we stop to think. In this case, we should consider past predictions by the forecaster. After doing a bit of research, we find that this company ran the same prediction previously - with a date of January 31st. Obviously, that didn’t pan out, they updated it to May 2nd. I wonder what date they will pick for their next prediction.
We may also want to identify how we received the information. This came in a social media feed and was “sponsored,” meaning it was a paid advertisement. I wonder why the company needed to pay to promote their prediction.
Given that this is just an ad, we need to consider why they made this fateful prediction…what is their end game? In this case, it’s to sell you their investment newsletter. Apparently, they make more money on subscriptions than their stock market predictions.
Making Good Decisions
No matter the prediction, it is important to practice skepticism. The bolder or more extreme the prediction, the more skeptical and discerning we should be. If we feel ourselves intrigued by the prediction, we should seek out additional information to either confirm or refute it.
But most of all, you should use me. That is why I am here! We can talk about whatever headline, prediction, or concern you have and ensure all your financial decision are in line with your stated goals and objectives.
© The Behavioral Finance Network 1. Ad Sponsored by Stansberry Research on Facebook. Obtained April 2023.