15-second videos that promise easy enrichment. Real estate, crypto, stock market: it’s all there. “I’m 22 and a millionaire. Aren’t you rich yet? Stop fooling around! Follow me on TikTok! »
While the over-40s are busy clicking shady links that promise a free iPad in exchange for banking info (I’m expecting mine any day), Gen Zers are being bombarded by these videos that whip the fear of missing an opportunity to make a quick buck.
“My 16-year-old sons can’t listen to me for 15 minutes or put a plate in the dishwasher, but they can spend two hours on TikTok listening to influencers,” quipped Antoine Bédard, senior director of the assistance to clients of the Autorité des marchés financiers (AMF), recently, as part of the 10th Financial Education Day organized by the AMF at McGill University.
Trained by viral videos, more and more young people are convinced, for example, that it is impossible to lose money with cryptocurrencies.
“Among influencers, we have very good, average and very ordinary”, summarized Mr. Bédard, who presented the group of experts on the question of financial influencers, or “finfluencers” in English.
The goal of financial influencers is to create familiarity with their audience, noted Sandrine Prom Tep, a professor in the marketing department at ESG UQAM.
“The financial influencer presents himself as someone who wants to help us. He plays on it. The message is, “I am like you, you are like me. I can make a million, and so can you,'” she said, adding that it’s hard for a young person not to be seduced by such a message.
Given their position, the financial advisor imposes a “distance”, which makes the message much less catchy. “Especially if the young person is a little rebellious, he will be more sensitive to the message of the influencer than to that of the financial adviser. »
Julien Brault, president of the company HardBacon, explained that with TikTok, any 17-year-old can become a mass media. “There is still a danger. People promote different investment products, perhaps without realizing that you need an AMF permit to do that in Quebec,” he said.
The fact that money is “the last taboo subject” allows influencers to fill this often vacated space in people’s lives, said Chantal Lamoureux, president and CEO of the Institut québécois de planification financière (IQPF ).
Marianne Spear, finance student and host of Parler d’argent c’est pas stressant, doesn’t oppose financial influencers, but laments that some put pressure on their audience.
“I sense a lot of guilt and shame and embarrassment in people in their 20s and 30s who follow these influencers [but aren’t wealthy]. They want to make a money pass fast enough, they are vulnerable. »
She said never to see a financial influencer’s follower count as a “trust mark” over their skills.
A good financial influencer, says Marianne Spear, is a thought-provoking person. “Personally, that’s how I see my role. I try to think further, but I don’t necessarily come up with an answer. »
Last week I asked you if you were trying to beat stock market returns.
Dozens of readers have told me about their misadventures on the Stock Exchange.
“I started investing in the spring of 2020,” Michel wrote to me. Very good period. Very profitable and interesting the first year. Zoom, Lightspeed, Nuvei, Electric Lion…I really felt like I had skated up Everest, all that money with so little effort…Three years later, I find myself with a negative stock market portfolio. »
A few readers have told me that they have beaten the market for a number of years, ranging from 3 years to 14 years.
More than 64,000 companies were listed on stock exchanges worldwide between 1990 and 2020. Of these, 2.39% were responsible for all of the markets’ gains during this period, according to calculations by Hendrik Bessembinder, of the University of Arizona. This means that these readers have managed to select a few.
I’m sure some will keep going. But let’s not forget: an investor’s life can stretch from the age of 18 to 98, a period of 80 years.
An investor who underperforms in just one of those eight decades could see his assets shrink by half or more than the person who just buys the market. It’s not for nothing that 95% of pros have underperformed over a 20-year period.
Are you not afraid of such risks? Congratulations, you are investing with your visor up. I wish you good luck in the markets.
