John and I used to play golf regularly until one day when he started asking me about what stocks I invested in. At this point in time, I refused to tell him what I was specifically doing until he mentioned what he was doing and just wanted to know why I was doing whatever I was doing.
As we were sitting in the cart waiting on a very slow group, he finally convinced me to share with him what I was doing. I told him several of my positions, how they’d been performing, and why I invested in those companies. When I did, he basically ended the conversation.
Soon, John didn’t want to play golf with me as much. It also turns out, he stopped blogging (he had a simple blog where he shared his insights), and just basically turned cold to me. I later found out the reason: one of the stocks we talked about ended up losing a lot of money after our chat. He lost a lot of money, and blamed me for not making the returns he was expecting. I have no control over his investment decisions, so is it really my fault?
Never Reveal Your Investments
I’d known John for years (since high school) and it saddens me that we no longer hang out. The trouble is, he compares himself to everyone across a wide variety of platforms. In my case, it was investing choices, but he also went after cars, and then houses.
It was a mistake revealing my investment choices to him. I should have known that he would have taken them as stocks he should be buying. However, I’m not going to apologize for making money in certain stocks while he didn’t. It’s one of the mistakes in investing I talk about all the time: blindly following others.
The trouble was, I was just trying to have conversation with him. Instead, I should have continued to focus on the strategy behind the stock picks. Instead, he decided to ignore the strategy, buy my stocks, and then bemoan the loss he incurred.
The Pros of Not Sharing Your Stock Picks
There are a lot of positive reasons for not sharing your stock picks with others:
- You can always play your investing performance down and you won’t face resentment from others who are less successful.
- Vice versa — you can always play up your performance if the needs dictate.
- You don’t always have to feel obliged to share your stock picks at meetings with friends, or with your awkward uncle at family dinners.
- You can blend in with everyone else.
- Nobody will ever try to bring you down, because they simply don’t know how well you’re doing.
Times When You Might Share Your Stock Picks
At the same time, there are reasons you should consider sharing your stock picks. However, many of these don’t apply to private investors.
- Show me the proof: nobody will believe you if you are consistently beating the market and are never sharing the proof.
- If you stick to broad examples, you really can be helpful with others starting out.
- Sharing your failures is typically always okay — people like to know you’re fallible.
Smart Strategies for Revealing Your Investments
If, for whatever reason, you feel forced to reveal your investments and stock picks, use these strategies to decide what you share and what you avoid:
- You can reveal your stock picks if you’re not making over the average stock market return, plus a little. If you’re crushing it, it might be best to avoid sharing that.
- If you’re keeping a broad-based index fund strategy, just saying that will make most people not want to know more.
- If you lost money or failed, people usually value those stories more as lessons learned.
If You Really Want to Know . . .
The next time someone tries to get your investing picks out of you, stand strong and keep the details to yourself. If you feel like you must share, keep it basic. You don’t have to go into the nitty-gritty details.
But people will always want to know what others are doing — it’s just human nature. And in the investing space, there is so much information, so much data, and others are doing so much, it makes sense that you want to know what others are doing.
That’s why there is one area where I feel comfortable sharing my thoughts: The Premier Forum. This is our signature paid product, and if you’re willing to join and pay, you can learn exactly what I’m looking at and investing in. Since you’re paying to read my insights, I don’t really worry about what you’re doing with the information, especially since you’re likely a much more experienced investor who’s willing to pay to join a private forum.
Beyond that, investments always make money when you enter them. In the forum, we share trades when we make them — not one to two years later. In my story above, John was investing in a stock in which I had already locked in huge gains over the prior 1.5 years. He was too late to the party. If you don’t want to be late to an investment, you have to get in on the buy, not the hold.
Readers, what are your thoughts on sharing your investments with people, even your closest friends and family?
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him here and here.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.