How to Spot Bad Investment Advice (and Where I Go for the Good Stuff)

There’s a bull market in online investment advice these days, and sorting out the good from the bad is very difficult. Facebook, Instagram, and YouTube are awash with posts claiming to hold the secrets to investing in everything from tech and meme stocks to gold and cryptocurrency. In a media world with little accountability, where all it takes is an online account, a web camera, and a little showmanship to claim expertise, the question for investors with retirement at stake becomes: 

How do you sort out the good advice from the bad advice? 

Here is my recommended approach to investment advice – either online, on the financial news shows, or in print – along with the sources that I personally use to understand what is going on in the markets and the economy.

Ignore anyone who claims to know what the next market move, winning crypto bet, or precious metal boom will be. 

Research has demonstrated, time and again, that no one can consistently predict what the markets will do over the next days, weeks, months, or even years. Instead, look for a balanced view of what may or may not happen and which conditions may lead to certain results. Put another way, the Facebook poster who claims the market will drop 15% next month may be right – but their claim is always true. The market can always suffer a steep short-term loss. The key is to recognize this truth, that short-term volatility and unpredictability are a feature of the markets and are unavoidable. 

Apply a little logic. 

If a poster truly had secret knowledge of where a particular market or investment was heading next, would they be trading that information for likes, clicks, follows, or subscription fees? Absolutely not. Markets work by capital flowing into undervalued assets, increasing their price until they are no longer undervalued. Any trader who believes they have found an underpriced asset must buy it before the public catches on that the price is too low. As soon as the information is made public, money flows in, the price rises, and the advantage is gone. 

So, when you see a YouTuber making claims about where a certain investment or market is heading, either a) they already own the asset and would be happy to have you buy into it too, raising the price so they can sell, or b) they are making bold claims based on nothing more than convincing guesswork in hopes of getting a following. In the case of most “influencers,” it’s the latter.

Credentials, experience, and accountability matter. 

In a day when anyone with a webcam and charisma can create a compelling video, look for external signs of validity. Journalists at major news outlets are usually held accountable for what they publish or say on a podcast. Certified Financial Planners® are held to a code of ethics and conduct by the CFP Board, which includes the duty of honesty and integrity when dealing with the public. FINRA and the SEC – licensed investment representatives have a duty to present fair and accurate information. While there are bad actors with credentials and licenses, these can at least serve as a first step in vetting sources. A post on social media requires no validity, and there are no repercussions for posting wrong or misleading information.

Filter out as much of the junk as possible. 

The next time a convincing poster pops up in your TikTok or YouTube feed, remember these principles. The best antidote is just to stop scrolling and pick up a good book. 

Here are my favorite sources for real-world news and updates. It’s a short list, by design. 

1. The Wall Street Journal remains my main source of day-to-day news. I read the main stories every morning, as well as the Market page, to get an idea of what is going on in the world. While every news source has its own editorial slant, I find their journalism remains the closest to a fair and balanced presentation and focuses on how the headlines will impact the economy and the markets rather than how I should feel about them. 

The WSJ website itself is only available by a pricey subscription, but they produce three “What’s News” podcasts every day, free to anyone, that summarize the headlines and market news. I usually listen to the morning edition while making breakfast or driving to the office, and often catch the evening edition while making dinner. 

Paying for the Wall Street Journal raises another point: if the source appears free, the true cost is your attention. And while ads are annoying, in the online world, your attention is measured in clicks and open – rates, so headlines are designed to draw your attention and entice you to read further. That is a very different intent from informing and conveying accurate information. 

1. For big-picture economic commentary, my go-to public source is JP Morgan’s Market Insights page. Dr. David Kelly and his team produce timely content that helps me understand what is going on in the financial world. 

They do take positions and express their expectations, but in a balanced way that allows for the nuance required by global economics – expectations are not delivered as predictions or prescriptions for certain investor behavior and outcomes. 

The Economic Update page offers a one-paragraph synopsis of where the indicators stand on economic growth, the labor market, corporate profits, inflation, and interest rates. The Weekly Market Recap comes out every Monday morning. The page also provides longer-form posts on investment questions raised by the current headlines. 

1. I try to keep up with Barry Riholtz’s The Big Picture blog. Barry has a wealth of Wall Street experience, runs a successful national advisory firm, and hosts regular podcasts and shows in the national financial media. His daily “AM Reads” post provides an excellent, curated approach to broader market and economic news, acting as a filter for much of the noise out there.  Rather than let the algorithm decide my wider reading, I like to use Barry’s list, as I feel we are philosophically aligned in how we think about the markets, the economy, and the media.

These are my favorite publicly available daily reads to get my bearings. Mind you, this is not ALL that I read – it is just my go-to, regular list for current news and economic updates. I read plenty of other stuff, filtering it through my criteria outlined above.