Watching television over the weekend, I came across one of those “gold is the only real investment” commercials. Since 2008, though, gold has not been a very good investment. But people fall for these commercials all the time.
Photo by pixabay.com
“Invest in gold” commercials are just as bad as payday loan commercials, free credit report commercials and any other advertising that tries to offer financial advice to sell their product. Since most people are intimidated by personal finance to begin with, it’s easy to assume the subtle suggestions you hear on commercials are valid.
For example, this US commercial from Rosland Capital encourages people to transfer their existing IRAs (individual retirement account) to a gold IRA so they can avoid losing money in another volatile financial crisis. If you know nothing about investing, you walk away from this assuming that regular IRAs are bad and gold is where it’s at. But gold is volatile, too. If you really want to avoid losing your money to market drops, you should make sure your portfolio is balanced for your age and don’t panic and sell when there’s a drop. But transferring your entire portfolio to gold is a risky move.
Of course, Australia doesn’t have IRAs, but the same principle applies. It’s one thing to sell a product for what it is, but to sell it as a good financial move is dangerous to consumers. Consumers actually believe they’re doing something to improve their finances, but in reality, most of these commercials sell a product that does the exact opposite.
The bottom line: Don’t take money advice from a commercial. Always do your own research. It seems obvious, but these advertisements exist for a reason: People fall for them.
Comments
3 responses to “Don’t Take Financial Advice From Commercials”
Except for Enloops. Those are a good investment. #Enloopsforlife
Enloops are that good is it?
https://enloop.com/
But how else will I learn about the one trick that James Packer
doesnt want people to knowis suing people over?