Lure of easy money goes viral

HOLY H I take smokes! two weeks off for the school s the h craps. holidays and my Barefoot inbox goes … to

Yes, it seems everyone wants to take a seat at the casino that is today’s share market.

And for those who don’t know their stocks from their jocks? Well they ask me … or their boyfriend.

Here’s a question I received from 22-year-old Tina:

“Hi Scott, I was wondering who the best companies are to invest in during this pandemic.

My boyfriend is into the stocks and has made $1500 in the last 24 hours, so I have given him some of my own money ($1000) to invest. But I was wondering what companies you would recommend.”

Tina’s boyfriend is “into the stocks”, and you can bet he’s got a swagger like Jagger over his … 24-hour track record.

“Hey girl, I’m going to make you rich.”

To be fair, for many people shares are just another way to gamble.

And to be even fairer, this is a worldwide phenomenon.

In the US, the three biggest brokers signed up more than 1.5 million new customers in the March quarter alone.

In China, trading apps are struggling to keep up as millions of traders “race to seek a quick buck in a surging market”, according to Bloomberg.

And in Australia, the number of new investors has increased more than threefold.

For me, these are worrying signs.

We are in the midst of a deadly pandemic that shows no sign of slowing and it’s causing real and lasting economic damage.

We are entering into a deep and sustained global recession.

And yet Tina’s boyfriend is making bank, baby!

So, how long will his luck last?

Well, author Matthew Hale Smith wrote in his timely book Bulls and Bears of New York: “Speculators do not make money, except by a turn as rare as good luck at a gambling table … Of the countless thousands who throng Wall Street from year to year, the great mass of speculators are ruined. Every broker on Wall Street has an entirely new set of customers once in three years.”

Wise words … written 146 years ago.

Tread Your Own Path!

The Barefoot Investor holds an Australian Financial Services Licence (302081).

This is general advice only. It should not replace individual, independent, personal financial advice.

If you have a money question, go to barefootinvestor.com and #askbarefoot