As we continue to be buffeted in the wake of President trump’s ‘Liberation Day’ tariff announcement, it is inevitable that the media is full of articles giving advice on how to navigate the increasingly volatile investment waters.
In the days before social media, there was at least a bar which anyone writing such an article had to clear in order to get published. But nowadays anyone can post words online without any checks and balances, which is why it is more important than ever to stop and think about advice you may come across – and in particular to consider who it is that is giving that advice.
This was particularly brought to my attention by a recent article on what purported to be a ‘news site’ in which a 34 year-old investor outlined how he had moved almost all of his retirement savings out of equities and into cash-based investments as the ‘Liberation Day’ story unfolded.
The piece says that although he had started the sell-off a few days before the tariff announcement, ‘on the day he cashed in his pension, the FTSE 100 index touched a more than three-month low’.
If this is true (and there is no way of knowing if it is), then what he has done is crystalize those losses and removed any chance of making them back when the inevitable market bounce happens.
In addition to all of this, the article implied that the writer was planning to take his pension soon (at the age of 34, something which is not possible except in a handful of circumstances), and that he was investing a sum of around £200,000 into cash ISAs – something which would take him ten years at the current cash ISA investment limit of £20,000 per year.
We cannot know whether what is contained in the article is accurate, but it is certainly not the only one in this vein that I have read. And sadly, some people still believe in the maxim ‘if it’s in print it must be true’, and will heed the advice given - when a much more appropriate aphorism would be ‘don’t believe everything you read, especially online’.
It is more important than ever to stop and apply a filter when consuming such ‘journalism’. The fact that unqualified, unregulated – and apparently unskilled – people can dole out investment advice on your social media feed is dangerous, unless you are very careful.
Here are some questions you might ask yourself when confronted with such articles:
Has the article been published on a platform which would not be described as a reputable media publication is subject to regulation and media law?
Does the author give no evidence of being a qualified and regulated adviser – or at the very least a respected and reputable financial journalist?
Is the advice given too simplistic, or too good to be true, offering easy solutions to complex problems?
Does the course of action being recommended strike you as a knee-jerk reaction?
If the answer to any or all of these questions is ‘yes’, then you should consider very carefully before following any advice you might read in the article.
The current volatile investment climate does indeed require attention to be paid to investments and pensions. But in such turbulent times, the usual advice is doubly crucial: don’t do anything before you have consulted a trusted and qualified adviser.