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  • Writer's pictureNate Baim, MBA, CFP®

Social Media & Your Money Don't Mix Well

Enjoy this week's edition of the Planner's Beta

Beta (n) - climber's jargon that designates information about a climb This digest's purpose is to share observations, ideas, and treasures found this week which you may also find insightful. Sharing does not mean it's an endorsement. I am endorsing the pursuit of knowledge and exploration.

Play Your Game, Not Theirs My thoughts on investment social media personalities

Social media is a conduit for sharing life. And more often than, not we get the opportunity to see moments of people sharing big successes in their lives. People are quick to share news of a new high paying job, a new car or house, or even eating out at the most excellent restaurant in town. And these are all things to celebrate, especially if it is hard-earned and well-deserved. However, we have to remember that as the audience who gets to peer into these lives, we only see a sliver of what is happening. We don't get to see the failures, costs, and risks taken to achieve those outcomes.

As someone who enjoys keeping a pulse on investment news, I see a pattern I wanted to share with you. I see more success stories about someone getting rich from cryptocurrency mania, electric vehicle craze, or genomics speculation. For those who have succeeded in growing their wealth in these highly volatile and risky markets, great! You took a risk, and now you are reaping the rewards. My message is for those who follow investment personalities on social media and contemplate chasing these returns to recreate impressive gains for themselves.

First, those folks who flash their massive returns via a screenshot of their brokerage report on social media of a speculative investment most often do not share the losses they incurred in other speculative investments. Just because they got it right once doesn't mean they are a good investor or possess any particular skill. They more than likely don't.

Second, success stories rarely communicate what kind of risks were taken to achieve such astronomical outcomes. Some folks I've seen on social media proclaim they were all in on a particular investment. That doesn't mean you should be, too. Understand that your unique situation is different from the talking head on YouTube.

Third, Morgan Housel stated, "Investing ability is unproven until it's survived a disaster." The past year has many seasoned investors scratching their heads. Markets provided spectacular returns in light of a pandemic, which resulted in the global economy coming to a screeching halt. And the second half of last year offered significant gains for investors. Many folks have flocked to platforms such as Robinhood during this robust bull market. However, we need to remember, last year's market performance was something of an anomaly. And there is no saying it will continue. So, if a market correction comes, will these stock picker's returns be as good as they were in the past? Will they make the right decisions in a down market? Time will tell and reveal the intelligent investors.

So, what can you do in an environment where it seems like other people are getting it right, and you are not? First, genuinely understand any investment opportunity before making a decision, and reflect on both the potential positive and negative consequences of the decision. Next, stick to a strategy where you can afford to stay invested long enough to see if your hypothesis is proven or denied. It's not always about timing the market; rarely can anyone time the bottom or top. It's more about deploying a solid investment strategy that you can consistently adhere to while taking the risks you can afford to take. I can't emphasize this enough: take calculated risks you can afford to take.

Everyone's situation is unique. But I believe a good starting point for many people looking to participate in individual securities is to have at least 90% of their investable assets in broadly diversified investments matching their risk tolerance, need, and capacity. Having the core of your investments in diversified assets helps manage risk. The remaining 10%, if you feel obliged and can afford to take on additional risk, can be invested in more speculative investments. In fact, I encourage folks who are curious about investing to use this smaller portion of their funds for personal development. Investing in individual companies is a great way to develop your understanding of how markets and investing works.

This past year has been challenging for a lot of reasons. And lockdowns lead us to spend more time on social media. If you find yourself feeling like you have missed out on significant gains, that is ok. But be careful of taking investment tips from a stranger on social media. They likely aren't playing the same game you are.

The Perils of Day Trading

Frequently trading stocks can be thrilling and financially detrimental. Most financial experts agree that frequently trading stocks and trying to time the equities market are two behaviors that can send a long-term financial plan off the rails. In this article, a rookie day trader shares insights into what led to his focus on day trading and the ultimate result: losses totaling over $120,000. Bored with the slow and steady approach to building wealth, this investor began looking for ways to create some excitement into investing activities and subsequently lost $120,000 by getting "over his head" and becoming addicted to the highs and lows of day trading. With many of us at home and having time to kill, and 24/7 access to investments, there's more opportunity to engage in day trading. The outlook for day traders is bleak: most end up losing big. If you're thinking about engaging in day trading, ask yourself a few questions:

  1. Are you typically able to pull yourself away from exciting games of chance (think poker, slot machines, etc.)?

  2. Most financial experts agree that day trading is akin to gambling. Can you effectively allocate a small amount to day trading without taking money from long-term investment or savings vehicles?

  3. Ask yourself what it is about day trading that excites or engages you. Are there other activities that could be less costly but potentially just as much fun?

This Month's Financial Planning Item - Review Your Debts

It is a start to a new year, which often means folks begin the year seeking to improve themselves and their lives. Financial planning is a process that systematically helps individuals create, analyze, implement, and monitor their financial and life goals.

A goal many Americans focus on is improving their financial life. One of the critical economic elements many households have to manage is debt. For this month's financial planning item, I encourage you to look through your current debts and ask yourself, "Am I deploying the best strategy to pay off my debts?"

Many American's have student loan debt and/or a mortgage. Use these two resources below to help organize your thoughts on how to improve your debt management strategies.

If you need independent advice on how to manage your debt, so it aligns with your overall financial aspirations, please review the services I offer and place an introductory appointment on my calendar.

If you are a current Pursuit Planning and Investments client, securely upload any statements needing review to PreciseFP. We can discuss this in our next check-in meeting, or feel free to place an appointment on my calendar for any urgent issues.

Managing Your Home Loan - Should You Refinance Your Mortgage?

When interest rates decline, mortgage refinancing becomes a trendy topic. However, there are several good reasons to consider refinancing. Each person's situation is unique, and you should consider many factors before deciding to refinance.

This flowchart helps guide your thoughts when considering to refinance your mortgage. This flowchart considers:

  • Interest rate trends

  • Current loan rates and terms

  • Available alternatives

  • Motivations for refinancing

  • Cautions against refinancing

Strategies for Student Loan Debt - What Issues to Consider

More than 44 million borrowers in the U.S. hold more than $1.6 trillion in student loan debt. There are many factors to consider when choosing a repayment plan or deciding to refinance or consolidate. Each person's unique circumstances will determine what strategies are available and favorable to them.

This checklist helps when planning around student loans and covers:

  • Relief available to borrowers

  • Repayment considerations

  • Costs and benefits of refinancing

  • Eligibility for loan forgiveness

Quote of the Week

"Moderation is the silken string running through the pearl chain of all virtues." - Joseph Hall


Have something on your mind? Schedule a free call with Nate.


Pursuit Planning and Investments, LLC is an Investment Adviser registered with the State of Oregon. All views, expressions, and opinions included in this communication are subject to change. This communication is not intended as an offer or solicitation to buy, hold or sell any financial instrument or investment advisory services. Any information provided has been obtained from sources considered reliable, but we do not guarantee the accuracy or the completeness of any description of securities, markets or developments mentioned. We may, from time to time, have a position in the securities mentioned and may execute transactions that may not be consistent with this communication's conclusions. Past results do not guarantee future results. Please contact us at 971-803-5948 if there is any change in your financial situation, needs, goals or objectives, or if you wish to initiate any restrictions on the management of the account or modify existing restrictions.  Additionally, we recommend you compare any account reports from PPI with the account statements from your Custodian.  Please notify us if you do not receive statements from your Custodian on at least a quarterly basis.  Our current disclosure brochure, Form ADV Part 2, is available for your review upon request, and on our website, This disclosure brochure, or a summary of material changes made, is also provided to our clients on an annual basis.

Investing involves risk. Past results do not guarantee future returns. This content should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice. The performance of an index is not representative of any particular investment, as you cannot invest directly in an index.


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