[Summary]
Social media stock dependence is the mistake of relying on stocks that are trending on social media.
The advantage of relying on SNS stocks is that they do not promise profits, but that they make it easier to organize the materials you need to look at.
In actual investment, the starting point is to check the poster's time horizon and interests. However, care must be taken as it is easy to misinterpret the amount of diffusion as reliability.
In this article, we will explain dependence on SNS stocks not as "knowledge" but as steps to check before buying or selling. Don't rush to conclusions, read according to your financial amount and time horizon.
First, distinguish depending on the SNS stock.
When looking at SNS stock dependence, first determine what you want to judge. The information you need will change depending on whether you want to know the meaning, confirm before buying or selling, or review your current holdings.
Especially for beginners in investing, the easier the words are, the more they tend to take them as a conclusion. Dependence on SNS stocks is not the only factor in making decisions. If you want to check it, it is more realistic to look at it in conjunction with fund management, holding period, and opposing materials.
Don't overestimate the merits of relying on SNS stocks
If you look at dependence on SNS stocks as a benefit, first make a narrow premise. It is important not to mix up whether you are talking about the market as a whole, individual stocks, NISA or long-term funds.
Checking the following points will make things a lot easier.
| Axis to check | Things to see depending on SNS stocks |
|---|---|
| purpose | What do you use to judge? |
| Time axis | Which is closer to short-term trading, long-term holding, or NISA? |
| basis | Which one is more important: price, business performance, interest rates, exchange rates, or psychology? |
| risk | When things go the other way, where should you look again? |
| action | Will it lead to buying, selling, or doing nothing? |
Points that can easily cause trouble in making decisions
The problem with relying on SNS stocks is not only when you lack knowledge. In fact, there are situations where we interpret something conveniently because we know a little bit about it.
- Decide first what you will be able to see by relying on SNS stocks
- Differentiate between conditions that bring about benefits and conditions that do not.
- When expectations are too high, test with a small amount
- Write down the terms of withdrawal before considering profits.
The important thing here is not to settle on one correct answer just by relying on SNS stocks. In investment, the meaning of the same material changes depending on the market, holding period, and amount of funds. When in doubt, prioritize confirmation over conclusion.
Checklist before buying and selling
Before using SNS stock dependence as a basis for making an actual decision, check at least these five things.
- Can you explain in one sentence the purpose of looking at dependence on SNS stocks?
- Have you confirmed one or more countermeasures or failure conditions?
- Are you investing your living funds or money that will be used soon?
- Have you decided in advance the criteria for cutting losses, taking profits, and continuing to hold stocks?
- Are you making judgments based only on social media or short headlines?
Checklists are simple, but they prevent you from adding reasons after making a decision. The purpose of checking SNS stock dependence is not to act quickly, but to reduce unnecessary judgment errors.
Summary
Dependence on SNS stocks is a material for organizing investment decisions. Even if you read it as an advantage, treating it as a stand-alone buy/sell signal will make your judgment difficult.
The points to keep in mind are as follows.
- Decide first the purpose of looking at SNS stock dependence
- Do not mix time axis and amount of funds
- Check not only good materials but also negative materials
- When using NISA and long-term funds, consider how to handle losses
- When in doubt, reduce your position or postpone it.
The more knowledge you have, the safer it seems, but in the market it can become dangerous if you use it incorrectly. It is realistic to treat dependence on SNS stocks as a tool to pause before buying or selling, rather than a word that forces you to make a hasty decision.