How to Stay Away from Losing Financial Trends
May 3, 2022
As someone who grew up in the 80s, I know all about investment trends. Back then, I remember being SO excited when I got hold of a “Cabbage Patch Kid” because they were all the rage.
I thought that just because they were extremely popular then, I was gonna be rich forever. I rode on that dream for quite awhile, but of course that (sadly) wasn’t the case.
Sure, I was just a kid with BIG dreams, but I wasn’t the only one. Others were racing to the stores to get hold of trendy items they thought would provide them with wealth in the future.
This ranged from anything like Pokemon cards to the Gameboy. And let me tell you—these people were serious about collecting. Take Cabbage Patch Kids for example: adults would literally fight over them!
I’m dead serious. Don’t believe it? Well, take a look at this collector’s article all about Cabbage Patch Kids. They were all the rage in the 80s, but would you pay a lot of money for one now?
For the most part, the answer seems to be no. Other than a couple specific Cabbage Patch Kids, these toys aren’t worth much. And yet, they were HUGE investment trends in the 80s!
Nowadays, not many people are interested in buying your gross old toy. But that wasn’t always the case. In 1983 these creepy little dolls were popular commodities. The public was obsessed with them, and then the craze just... ended. Cabbage Patch Kids may not be anything worthwhile to the eye today, but in that short time they were everything.
Just like any other fad, it ended almost as soon as it started. It set sail on the high of its popularity, but in the end it sank to the bottom of the ocean.
This is how it is with all investment trends: they blast off in popularity (even though it’s typically not a necessary item), and then go downhill fast.
Want to know the worst part of this? If someone had put their money towards something else—the NASDAQ Index for example—they could be rich now.
If there’s one thing I’ve learned from my Cabbage Patch stunt, it’s that trends are NOT our friends.
It’s totally alright to like popular things, but maybe take a second before putting loads of money into them. Stop and answer a few questions first:
Why is this item popular? Is there actually a need for it or is it only popular because of the masses? Does it seem like something meaningful enough to be popular years from now? Thinking back to most investment trends, the answer to all of these yields resounding negatives.
If it seems like it’s too good to be true, it probably is. One thing that trended pretty recently is Bitcoin. In 2017, Bitcoin was worth about $19k. This was the height of its popularity.
Then it dropped steadily leading to today—the bitcoin is now only worth about $8k. Yet, just like with any other investment trend, people were enamored with it. The thought of becoming wealthy in the future based on a smart purchase in the present is extremely appealing to most, and because of this want, bad investments are made with fads.
So, How Do You Keep Away From Investment Trends?
The answer my friends is to be careful. Make sure you’re truly thinking about the worth of a purchase before you put your money towards it.
After that, if you really think that you’ve found something worthwhile (or it just brings you joy), you can go for it! But make sure you don’t swim out too far into those waters, stay in the shallow end to get a taste while keeping safe. Don’t follow investment trends just because they’re popular!
One more tip:
When it comes to managing your money, everything needs to be balanced well. Reserve some time to go over what you’re currently investing your money in and see how well balanced it is—that means everything from your home to the stock market. By doing this, you’ll know just how much work you need to do to center your financial life and prepare for any big investments!
Start Working Now:
Want to know where you stand in the five values of life tied to happiness (Your 5 Cores), take this two minute Core Values Quiz to get your core score in the five values of life.