We’ve all heard the tried-and-true advice: buy low, sell high. If investing were really that simple, we’d all be retired on our yachts by now.
Today’s investors face something close to information overload: more access to information, and more investment opportunities, than any previous generation. And there isn’t necessarily one spot to turn for advice anymore. Social media, financial websites, podcasts, newsletters, and low-cost trading platforms have made it easy for virtually anyone to research investments and manage a portfolio.
Your generation is taking a far more active role in your own finances.
Previous generations had fewer sources of investment information. Your parents or grandparents might have worked with a financial professional, read about the markets in the newspaper, or invested in companies they knew personally. Today, you can open an app and find thousands of opinions on a stock, fund, sector, or strategy within minutes.
There’s real value in being informed. But more information doesn’t make investing easier—and it doesn’t guarantee better results. Here’s what to keep in mind:
Information isn’t the same as insight.
Efficient market theory offers one explanation for why “more info” doesn’t equal “better returns”: when information is widely available, it becomes harder to consistently find investments that are meaningfully mispriced—and harder still to profit from that information before others do.
News that once took days to spread now reaches millions of investors in minutes. Earnings announcements, economic reports, and market-moving headlines are all analyzed and debated worldwide almost as they happen.
But that doesn’t mean it’s impossible to benefit from investing. As we discuss in our post, most investors win not with a brilliant, market-beating call, but by losing fewer points than everyone else and sticking to a disciplined strategy instead of chasing headlines. Be skeptical of anyone who makes outperformance sound easy, whether it’s an uncle with a “sure thing” or a stranger online calling the next big trade. For every prediction that goes viral, countless failed ones quietly disappear.
The question social media leaves out
The most important question in investing is also the one most content creators rarely ask: How does this fit your goals?
A stock, ETF, sector, or strategy can be perfect for one investor and completely wrong for another. Your time horizon, risk tolerance, income, and personal circumstances all matter. Saving for a home in a few years is not the same goal as investing for retirement decades away. Building an emergency fund is not the same as growing long-term wealth. How much risk to take should start with what you’re trying to accomplish and not with whatever is trending this week.
If it sounds too good to be true…
Social media isn’t just where you’ll find investment tips that are a mismatch—it’s also where a lot of investment scams start.
Before committing money to any “can’t miss” opportunity, ask three questions:
- Is the promised return actually consistent with the risk?
- If this is such a good deal, why is it being offered to me instead of being kept by whoever’s offering it?
- And am I doing my own homework, or just trusting that someone else already has?
As a rule of thumb, a diversified 60/40 portfolio has historically returned over 9% a year1, with real swings along the way. Anything promising higher returns with lower risk isn’t a hidden opportunity; it’s a warning sign.
Read our full breakdown of investment scams for more on spotting them before they cost you.
Beyond buy low, sell high
Being informed matters. Understanding markets matters. Asking questions and staying engaged with your finances matters. But good investing is about more than spotting the next big thing. It’s about building a strategy grounded in sound principles, suited to your circumstances, and aligned with what you actually want your money to do. Shift the question from “Is this a good investment?” to “Is this a good investment for my goals?”
There’s no shortage of information out there. What matters is having a disciplined process to make sense of it.
¹ Source: Russell Investments, “Is the 60/40 Balanced Portfolio Broken? Not Forever” (Morningstar Direct data, 60% S&P 500 Index / 40% Bloomberg U.S. Aggregate Bond Index, January 1980–December 2022). Past performance is not indicative of future results. Indexes are unmanaged and cannot be invested in directly. https://russellinvestments.com/us/blog/the-60-40-portfolio