6 Totally Useless Pieces of Investing Advice to Ignore

Ladies and gentlemen, listen up! As you dive into the world of investing, you’re going to encounter a lot of noise. Some of it is good, some of it is bad, and some of it is downright awful. Today, we’re going to talk about the worst of the worst—six pieces of investing advice that you should probably ignore. Let’s get started!

1. Day Trading Tips for Beginners

Useless Advice: You can beat the market if you’re smart about it.

Better Advice: Even seasoned financial experts rarely beat the market consistently, so passive investing can be a better choice.

Day trading is like trying to catch a falling knife. It’s risky, and the data shows that it’s incredibly difficult to beat the market again and again. You’re better off with a passive investing strategy. Individual stocks can help generate wealth, but they are extremely risky. People get swept up in a Reddit craze, and before you know it, they’re buying stocks they’ve never heard of. Don’t fall for it! Stay away from day trading advice on social media—it’s a dark corner of the Internet.

2. The Next Great Cryptocurrency Pick

Useless Advice: Buy this crypto to get rich quick!

Better Advice: If you want to invest in a particular asset like cryptocurrency, keep it to a very small percentage of your overall portfolio.

Attempting to find the next big token is like trying to catch a shooting star. It’s extremely difficult, especially with the rapid issuance of new coins without much oversight. People who are lower income and who are in the lower end of the socioeconomic status have more of their wealth in crypto as a percentage of their asset allocation. This is unnerving! If you’re looking to invest in this emerging technology, crypto exchange-traded funds (ETFs) that focus on blockchain, Bitcoin, and Ethereum can be a good place to start. Even if it’s a single currency like Bitcoin or Ethereum, limit your crypto holdings to 5 percent of your investment portfolio.

3. ‘Be Your Own Bank’ with Life Insurance

Useless Advice: The secret to durable wealth is permanent life insurance.

Better Advice: Term life insurance is the best option for most people; the money saved on premiums could alternatively be invested directly in the market.

Permanent life insurance is like a fancy car that looks good but costs a fortune to maintain. Term life insurance is the reliable sedan that gets the job done without breaking the bank. You hear on TikTok, “Be your own bank. Don’t deal with lenders that are going to check your credit.” But in reality, that’s not how it works out. Permanent life insurance charges much higher premiums than term life insurance. If you’re just getting started building wealth and don’t have a lot of spare cash, you may risk missing out on market gains that you could’ve seen from the money you spent on premiums. The opportunity cost can be quite large. A financial advisor can help you weigh your options.

4. Annual Return Expectations and Living Off Interest

Useless Advice: The secret to investing is living off interest and not touching the principal. Or, this (fill in the blank) investment offers guaranteed double-digit returns.

Better Advice: Manage your ROI expectations and realize that no investment is risk-free.

Living off interest and not touching the principal is like trying to live on air. It’s not realistic. No investment offers guaranteed double-digit returns. Manage your ROI expectations and realize that no investment is risk-free. The market is unpredictable, and you need to be prepared for the ups and downs. Don’t fall for the hype—it’s a recipe for disaster.

5. This Investment Has No Risk

Useless Advice: One of the most misleading pieces of advice is the promise of a risk-free investment.

Better Advice: Understand and manage risk within your portfolio.

All investments carry some degree of risk. Even the “safest” investments aren’t entirely risk-free. Whether it’s market volatility, credit risks, or liquidity concerns, understanding and managing risk within your portfolio is an integral part of investing. Diversification can help mitigate risk, but it’s essential to acknowledge that no investment is entirely risk-free.

6. You Should Buy (This Hot Stock or Investment)

Useless Advice: Whether it’s the latest meme stock or the hottest cryptocurrency, making investment decisions based on market trends and fads can be a recipe for disaster.

Better Advice: Focus on a well-researched, diversified portfolio that aligns with your long-term financial goals.

Stocks are subject to volatility, and their value can fluctuate dramatically in the short term. Just because your neighbor or workplace buddy made a killing on a particular investment doesn’t mean it’s right for you. Even if it was a good purchase, by the time you hear about it and buy in, the opportunity for major growth may already be over. Instead of chasing hot stocks, it’s wiser to focus on a well-researched, diversified portfolio that aligns with your long-term financial goals. Broadly-diversified index funds and exchange-traded funds (ETFs) are considered some of the best investments for new and experienced investors alike because these funds diversify your portfolio at a low cost.



So there you have it, folks! Six totally useless pieces of investing advice that you should probably ignore. Stay away from day trading, be cautious with cryptocurrencies, and don’t fall for the hype of permanent life insurance. Manage your ROI expectations, understand the risks, and focus on a diversified portfolio. Your future self will thank you!