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Saturday, 12 December 2020

Well, dah!

You know nothing about the stock market, share trading, or finance in general.

But some guy has made a motser trading CFDs - and he assures his followers its totally safe - it's basically a 'sure thing'. Just copy his trades exactly and you can't go wrong!

This sort of trading makes buckets of money for the CFD platform, as they get paid for each trade that is executed, whether it makes or loses the investor money, so they pay actors a lot to "sell" the concept. And if Alec Baldwin says its a good thing, it must be! After all, he does a great impression of Trump.

So why not go ahead and invest? Why not even borrow some money off your parents, or "invest" the money you had saved up for your wedding? You'd make even more money! Right?

This article in the SMH explains the recent trend in 'copy trading' and the dodgy CFD providers who provide it.

All I can say is - remember these truisms:

"a fool and his money are soon parted"

"if it sounds too good to be true, it probably isn't"

"those who do not learn from history are doomed to repeat it"

"history doesn't repeat itself, but it often rhymes"

People have been losing money to 'get rich quick' schemes since money was invented. Many of the people who lost their life savings investing in the Mississippi scheme in 1719 probably did so because they copied others who appeared to be making a fortune, as would have many of the folk who lost money in the great Tulip mania of 1637.

If there is one positive from this sort of financial stupidity, it is that it explains why there will always be income and wealth disparity in the world - as long as people are free to make choices for themselves, and some people are complete idiots.

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