Sometimes the best way to become successful at investing in technology stocks is to avoid the black swan or the big disaster.
I hate to say it but investing risk has never been higher as we migrate our lives to the internet to extract what we need from personal to business affairs.
One question that keeps getting rehashed that I thought I might take time to address is the rise of TikTok influencer-adviser.
According to a brief Google search, TikTok, known in China as Douyin, is a video-sharing social networking service owned by Chinese company ByteDance. The social media platform is used to make a variety of short-form videos, from genres like dance, comedy, and education, that have a duration from three seconds to one minute.
Unfortunately, for serious retail investors lately, content has migrated into high-stakes themes like finance and financial advising giving rise to content that is produced by video creators to get a piece of the financial industry.
Naturally, this has brought down the level of the financial content on the internet to historic lows simply because most of the content is marginal at best.
These promulgators often preach about their status of “trading gurus” and often leverage the hype of digital currencies to claim they are fully invested in “crypto assets” and urge anyone reading to become one of their new “cult followers.”
They are also usually paid to market a bulletproof financial app or certain crypto asset to avid followers without properly disclosing that they are being paid for the advertisement.
This behavior is being encouraged by the TikTok algorithms who order this type of misleading content at the top of searches simply because it gets more hits being a click-bait type of content.
The more outlandish the videos become, gloating about get-rich-quick schemes and 1,000% daily returns, the higher up in the search queries they usually populate when filtered through TikTok algorithms.
These accounts are known as financial “influencers” and share 100s of such videos every month featuring fraudulent success or minimizing the difficulty of profiting through trading and a mix or mash of everything in between.
Even some proclaim to have unlocked the holy grail of trading and “guarantee” 100% returns or your money back.
Another speaking point they like to touch on is how video watchers can “also” afford wealthy lifestyles without having to work, at least in the traditional way.
The sad fact is that this content is incredibly hurtful for naïve or beginning investors.
To dumb down the travails of investing and trading to something easier than pouring a glass of water is a lie.
Many of these novice investors are duped into paying for services that are nothing more than promotional buzz offering hyped-up marketing language as specific trading advice.
Unfortunately, US regulators have turned a blind eye to what is happening on this Chinese platform, and imitators are spawned daily and are certainly incentivized to do so.
While I must admit that regulating this type of behavior on TikTok is incredibly messy, to leave this unchecked will result in massive fraud for the little guy that I try to help.
I will say the main reason for ignoring these TikTok “influencers” is because there is even worse cybercrime taking place out there and the content these influencers are peddling is straddling the gray areas of the law.
The digital migration during Covid has created a tsunami of fresh cybercrime that is really making the TikTok gurus look like choir boys.
Here are some statistics to stew over according to Gartner research.
- 88% of organizations worldwide experienced spear-phishing attempts in 2020.
- 68% of business leaders feel their cybersecurity risks are increasing.
- On average, only 5% of companies’ folders are properly protected.
- Data breaches exposed 36 billion records in the first half of 2020.
- 86% of breaches were financially motivated and 10% were motivated by espionage.
- 45% of breaches featured hacking, 17% involved malware and 22% involved phishing.
When digital professionals went remote, this also increased the risk of cybercriminals wreaking havoc by isolating their targets.
In the scheme of the internet, the TikTok trading “gurus” are small fish to fry when hackers are attempting to topple state of federal governments and Fortune 500 companies; but that doesn’t make it okay.
The Financial Conduct Authority (FCA) is already looking into trading scams and considering ramping up its capacity to monitor those TikTok creators and others who are flogging trading signals, managed investment services, or other fraudulent services.
But it’s not enough, and readers need to understand the heightened risks of diving feet first into these TikTok vortexes where you just get whipped around unknowingly.
Pre-emptively protect your portfolio by avoiding these TikTok trading gurus.
Stay vigilant and happy trading and just know there is no holy grail of trading.
It’s hard work earning your crust of bread.
THE NEWEST RABBIT HOLE FOR FINANCIAL SCAMS
