Investment Analyst Reacts to Finance TikToks - Doomsday Doomscrolling

Hello, everyone. Welcome to the Plain Bagel. It's 2026. Gas prices are surging. Bond yields are up. AI is apparently trying to kill us. What better time than now to watch some finance TikToks, to get some financial guidance for how to navigate where we find ourselves. Now, most of you know the drill, but if you happen to be new to this channel, welcome. My name is Richard Coffin. I'm a registered portfolio manager, a chartered financial analyst, charterholder, and certified financial planner professional. And if you happen to be new to run. Joking aside, there are excellent creators on TikTok, some great information. There's also no kind of barrier for, you know, just harmful financial advice that can circulate. So today we're going to review some popular TikToks and give some input on perhaps some points of clarification on some information. But without further ado, let's, of course, pop into it. They are calling 2026 your last chance to get rich because the crash is coming. Are they? I must've missed the BlackRock and George Soros memos on that. Just like in 1929 when the market fell 89%, in 2008 when it fell 57%, and in 2020 when it fell 34% in just 33 days. And every single time the people that were brave enough to buy the dip became millionaires. Now these weren't just regular corrections. They were generational buying opportunities. When the S&P 500 fell 30 to 50% from all-time highs and the VIX spiked above 50, signaling total panic in the market. So the VIX, just quickly, volatility index, measures how much stock prices are jumping around. So generally spikes during periods of high uncertainty, like she's suggesting. Last time it was above 50 was back in April of last year when Trump announced that he was liberating us from free trade. So yeah, tends to correlate with high market uncertainty. History does not lie. When fear peaks, wealth gets built. So here's how you can prepare before it's too late. One, make as much money as possible right now. Whether it's side hustles, overtime, asking for a raise, you want to focus on making money right now. Number two, cut unnecessary expenses. No more Netflix, no more Uber Eats. Live lean so that you can save as much ammo as possible. And lastly, start moving all your extra cash into your brokerage accounts. You can part this in a money market ETF so that they can earn interest while you wait. But when the S&P 500 drops another 30% or the VIX spikes to 50 plus, you will have the ammo to buy the dip of a lifetime. This might actually be the last easy year to get positioned. Very dramatic music. Very intense. So look, I don't know if a crash is coming and there certainly are reasons to be cautious with the market. Valuations are high for many different metrics based on historical standards. You have a low equity risk premium, which just generally means that investors aren't being compensated a whole lot of return for the risk they're taking on. And, you know, there's a lot of concern around concentration and AI specifically. But the thing is, despite this video's dramatic music, despite it showing a bunch of scary charts of past financial crises, you might have noticed there is zero justification provided for why she thought a crash was coming beyond some ominous they calling 2026 the last year to get rich. There's so much research that shows that timing the market is just a losing strategy. A lot of the market's best days occur around the same time as some of the worst days, which makes it difficult to time between the two. And if you happen to miss some of the best days, it can pretty meaningfully reduce your return. And you can be waiting and missing out for a long time waiting for a 30% correction. So if you're losing sleep over your risk exposure, there's certainly steps you can take looking at equal weighted indices if you're worried about concentration or, you know, again, maybe raising some cash. But timing the market because a video used movie trailer music to scare you is just setting yourself up for failure, right? So all of the largest hedge funds are currently shorting the NASDAQ. If you don't know what that means, basically, all the largest groups of money, which is what hedge funds are, it's just a compilance of money for wealthy individuals. They're shorting the NASDAQ meaning they're betting against it. So when somebody shorts a stock, that means they're betting that it's going to drop. And when it does, they make money. So the people with all the information on all the sharing and betting that goes on are currently right now betting against the ******* NASDAQ, which is the spine of the United States economy, basically, like I'm being so ******* for real. So I think that bubble is about to pop. I think it's here. So I'll be transparent. I don't know what the status of NASDAQ shorting activity is. I'll take his word for it that, you know, we're seeing hedge funds short. And, you know, generally he is right in a way that hedge funds are more or less only really accessible by higher net worth individuals. So there is some truth that, you know, hedge funds, which tend to be more sophisticated, they take on more risk. Some people will view them as kind of the smart money. They might be following the strategy of shorting the NASDAQ. However, just because they're shorting the NASDAQ doesn't necessarily mean they think the market's going to crash. That could be the case. There could very well be some hedge funds making very aggressive calls against the index right now. However, hedge funds also use different, again, complex strategies, one of which is called a long short strategy. And a long short strategy can involve investing in a stock or a series of stocks while shorting their relevant index or sector or what have you. And the reason they do that is because they might think these companies are the best stocks in the space, but they're not sure whether the space as a whole is going to do well. So they're basically isolating their return so that it ends up being the relative outperformance of that one or handful of stocks compared to the peer group. Because while they're long on those companies, they're shorting the broader index to basically hedge that index exposure. I don't know if that makes sense, but all to say there could be a valid reason a hedge fund is shorting the index beyond them thinking that it's an active call that it's going to crash. It could just be hedge funds hedging some risk related to the NASDAQ. Maybe it is AI related. Maybe they're just locking in profits from the massive rally since you can short rather than selling to do that. Again, I don't know if that's the call being made, but just a consideration, you know, before you kind of start filling up the shelter with canned foods or anything. Next TikTok. But that's a budget. You can call it, you know, a bucket model or jars, but we're budgeting. You're planning. What? 10% of whatever you earn, you go and you spend it as if you are wealthy, get the five star hotel, treat yourself and your partner to a glorious five course French meal. What are you telling your mind? I'm wealthy. Yeah. So notice you are saving, but you're not saving for hard times. You're saving for the business. You're going to So that's how you shift your emotional energy around money. The five buckets model. I swear, if you have a nice enough podcast setting and you say things with enough confidence, you can get away as a, as a finance genius on social media in terms of putting 5% of your money towards charity. Look, that's everyone's personal decision. But if you're at a point where, you know, you're struggling to get by, you know, secure your own mask before that of, of your neighbor. In my opinion, you know, as a financial advisor, I wouldn't encourage people to buy luxury goods because lifestyle creep is a real thing. If you find that you're always buying five star hotels and five course meals, uh, you know, eventually you become acclimatized to that and might spend more and more of your budget on it. And that kind of stuff won't bring everyone joy. There's a very famous book, the millionaire next door that sort of highlighted this idea that most millionaires don't actually buy luxury goods. It tends to be people trying to pass as a very wealthy, but if luxury goods bring you joy and you have the discipline, you know, that you can stick to a budget for it. Um, great. It's the same view I have with buying coffee. There's some people who sort of advocate for the cold Turkey approach of, you know, never buying coffee out because it's always cheaper to make it at home and you can save a good amount of money if you always make it at home. But my view is that if you've done the legwork around budgeting and you want that Starbucks Frappuccino, I say, go for it. Not because it's going to give you a wealthy mindset, but because life is short. The issue is people not tracking their discretionary spending and having no concept of what they can afford because budgeting takes quite a bit of mental bandwidth. And some people might not have that available. It's why some people do have success with cold Turkey strategies like never buying coffee out or never buying luxury goods, because it's simple, it's straightforward. And you know, for people who don't have the energy to plan things out, it's something you can implement without a full budget. But in my opinion, the ideal method is getting to know your spending habits, what you need to put aside for retirement and other financial goals, and then budgeting, right, planning out how much you need to contribute there and how much you need to save, and then allowing yourself to have a budget for those things that bring you joy, because you know that you're still progressing on these other important goals. So I don't love this framework, you know, broad strokes, kind of makes sense around the amount you save and the like, but on luxury goods, given that most people are trying to rein in their spending, I wouldn't encourage it's not going to unlock some secret money manifestation brainpower for getting rich. So the Fed just raised interest rates for the first time since 2023. Let me explain what all of this actually means for your money. Alright, so here's the quick version. The Fed is the thermostat for the whole economy. And when prices are running hot, and right now they are gas, groceries, all of it, they turn rates up to cool things down. So today, they bumped it up a quarter of a point to about 4%. This was a unanimous vote. And they're already hinting at one more before the year is out. So here's the part that they don't say on the news. So when the Fed raises rates, it raises the cost of borrowing for everybody, your credit card, your car loan, that buy now pay later that you probably forgot about, all of it just got more expensive. But this is where a lot of first gen wealth builders often get it twisted. So a rate hike is not just bad news, it's actually a test of whether your money is set up right. So here's what I'm doing tonight. Number one, pull up your credit card APR right now. Okay, if it's over 20%, and it probably is that balance is actually your emergency. So attack it before anything else. Because the Fed just made it more expensive to carry that balance. Number two, check where your savings is actually sitting. If your emergency fund is in a regular bank, earning basically nothing, you are literally leaving money on the table. Okay, high yield savings accounts and money market accounts pay more when rates go up. And I already started receiving notifications that my rates are going to go up. This is the one time a hike is actually on your side. Number three, do not stop investing. I've been doing this for over 20 years. Every single time rates go up, somebody panicked, sold their little index funds or stocks and missed the whole recovery. Alright, so keep your automatic contributions on. Boring wins. Number four, if you have a variable rate on anything, a HELOC, an adjustable rate mortgage, private student loans, this is your sign to look at locking in a fixed rate because they said that one more hike is actually coming. Okay, yeah, that was a good one. I agree that when you hear interest rates rising, it's generally a good idea to shop around for savings accounts because you might see promotions and the like. If you are using a savings account, always make sure that it's an insured one. The US and Canada have programs to back deposits for insured institutions in case they ever fail. And I will say around locking in variable rates, generally a good idea, especially if you can't afford an unexpected increase in your interest payments. But if everyone is expecting a rate hike, that's already going to be priced in today, right? A bank's not going to cut you a deal if they assume that rates are going to go higher in a few months. One tangent that I think is worth touching on here is that while it's true that the federal reserve hiking interest rates generally increases other interest rates in the economy, the federal funds rate, which is the rate that we're seeing influenced here, is for very short term loans. And so what you tend to see is that very short term loans and savings accounts are the ones that are impacted first. And then eventually you'll see things like car loans or mortgages may be influenced by a rate hike. So theoretically, you could see the federal reserve hike interest rates while also seeing longer term interest rates decrease. Now, currently, we're also seeing longer term rates increase because of rising treasury yields, which is a very important factor for those longer term yields. And interestingly, the federal reserve can also influence those with different mechanisms beyond specific rate hikes and cuts. But that topic could be a whole independent video. I'm just adding kind of further detail here. Generally speaking, good tick tock and useful insights. Take your monthly income and multiply it by 0.55. That's the maximum you should aim to spend on essentials like housing, groceries and transportation. Then take your monthly income and multiply it by 0.05. That's your guilt free spending money. Use it however you want without feeling bad. Then take your monthly income and multiply it by 0.1. If you have debt, use that money to pay it down each month. If you're debt free, add it to your investments. Take your monthly income and multiply it by 0.15. That's how much you should aim to save for short term goals like buying a home, getting a car, taking a vacation or anything else you're working towards. And lastly, take your monthly income and multiply it by 0.15. That's how much you should aim to invest every month to build long term wealth. So another budgeting one, not necessarily a bad one, although I do think the categories are a bit strange. Personally, I would put debt payment in the same bucket as long term investing. And then you have to just decide which to allocate to because not for all debts, but if you have high interest debt like a credit card payment, you're going to want to pay that down before you really allocate any money towards long term investing. Generally speaking, this is obviously some sort of variant of the traditional rule of thumb, the 50 30 20 rule, which is 50 percent on necessities like rent, groceries and things like that, 30 percent on wants and 20 percent on debt payment or long term savings. But truly, there's no one rule that fits everyone. It's great if this kind of rule of thumb helps you get started. My preferred method is, again, getting to understand your spending habits. Personally, what I do is I put everything on one or two credit cards and then every paycheck when I pay it off, I categorize everything in a spreadsheet. Some people use apps that automatically categorize stuff based on, you know, your credit card transaction details. And then you can have an idea of where you can cut back if you need to or if you even need to cut back. You know, most of us can probably do better with their spending habits, but you won't know unless you know. Right. Rules of thumb can help you gauge. Again, you know, maybe you realize you're spending more on discretionary than most people, but it's usually better to tailor to your own needs in your own financial situation. Number one, take your monthly income and multiply it by point five five. Wait a minute. It's the same content. This is the exact same budget. It's actually the exact same script, except it's six thousand dollars. OK, this one is actually this one was actually first. The second guy stole it for Canada. Just a vicious trade war these days, folks. Yeah, plagiarism is pretty rough on social media. This is obviously a very blatant example. And tick tock, I think because of the discoverability is, you know, it's more rampant there. But even on YouTube, you know, I've seen videos that have taken a script of mine and fit it through an A.I. engine and then post the exact same video in terms of the research and the points hit on. But with, you know, I generated content and it's depressing. Anyway, that's a shame. But next tick tock. If you can't find a job right now, if you're getting turned down by everybody, if you're in between jobs, unemployed, looking for another source of income, please start day trading. All you need is a phone. I cannot stress this enough. You make money every single day and it takes minutes. I don't mean like 30. I mean, like under five. I started day trading about six months ago. This is rage bait, right? She's hitting every talking point of a day trade scammer. And I have tripled the money that I put in my account. Even if you don't see yourself doing it long term, it's good to do. Even if you're trying to build an emergency fund for something, especially if you don't have a job or a consistent source of income that is guaranteed money daily. Ladies and gentlemen, we got her. That was rough. What really bugs me too is like most people would probably see this and be like, yeah, whatever. Like that's you're telling me to gamble basically and saying it's guaranteed to boot, which could actually get her in legal trouble. She's actively targeting people who have lost their job or are unemployed, which is just really scummy. Especially because, you know, we already know it, but she sells a discord membership for learning how to day trade, which is actually quite impressive because according to her, she started six months ago with under $2,000, allegedly made a few thousand dollars off of that. And she's already got a $50 a month discord membership because she might as well be Warren Buffett. I guess. Yeah. I've commented on the same video. I think every single TikTok review I've done. So not much to add. Don't do this. Vast majority of people lose money day trading. Next video. If I'm investing in AI or I'm going to pick the best AI company, the biggest, the bestest, the one with the most profits. And I'm like, I'm going to buy it. I'm going to buy as much as I can. I'm not going to buy four of them. Okay. The reason you're buying four or five different stocks is because you don't know which one's going to work. Yeah. So just know which one's going to work. How can you know which one's going to do your damn research? Of course. Thank you, that's the piece I was missing. So do your research, grab some money from your job. You're a baseball player. You grab some money, your salary, your career choice. Make sure you don't lose it. And boom, pour it all into one bed. It's that easy folks, man. I don't know. I can't keep commenting on Grant Cardone videos. It's just, it's endless too much content, but yeah, it's not that easy. There are some more valid criticisms of diversification. Warren Buffett has called it diversification. This idea of buying a bit of everything without really understanding any of it. Most research highlights that you've eliminated most of your unsystematic risk at the, I think it's a 20 to 30 stock mark, but no one can predict the future. No one knows which company is going to be the best. And even if you find the company that currently is the best, that doesn't mean they're going to have staying power in that position. If you look at the dot-com bubble, the companies that were the best of their field didn't always have staying power. The first browsers no longer exist. They were taken over by Internet Explorer, which itself has since kind of fallen in the backseat of exploring programs. And just to be clear, my view is that most people shouldn't be stock picking anyway, right? Unless you have a deep dive research into individual stocks, you can still do tremendously well with a very broadly diversified portfolio. Number one, take your monthly income and multiply. No, not you too. Jacob does money too. How could you? It's getting rough out here, folks. I'm not saying I'm the most original guy. Even TikTok reviews were not my original idea. I saw other people do them first, but this is rough. And what's sad is a lot of these people are presenting themselves as financial experts when seemingly they're just copying what they saw on social media themselves. So you got to be careful. Just because an idea circulates doesn't mean it's necessarily a good one. If I'm going to risk a dollar, I want to be certain I can make five. You and I, most average people would normally think, I used to think, well, 12, 15, 20% return, right? But here's how it works. If I risk $1 and I'm certain I'm going to make five and I'm wrong, I'm down one. I can risk a dollar and still make four. I can be wrong four times out of five and still be okay. That's how those guys become billionaires. Finance gurus come in full force today. If I'm being generous, I think he's trying to touch on the idea of pursuing asymmetric upside opportunities and combining that with some sort of shoot for the moon, because even if you miss, you'll be among the stars, right? But for investing, beyond no one knowing beforehand which positions are going to five X with certainty, that's just not how the risk reward trade-off typically works, right? If you think of a probability distribution, it tends to be that opportunities with the highest upside, reaching furthest to the, looking at it the right side of the graph, also have the highest probability of downside. In fact, if you look at distribution curves for, say, penny stocks, which meet that criteria, that's exactly what you see. You see fat tails and what's called a right skewness to it, meaning that's more probable that you actually lose money on the position. The trade-off isn't, if I don't make 500, I'll just make 400 or 300 or 200 or whatever. It's if I don't make 500, I might lose everything or even more than 100% if I borrowed money to pursue an idea or a venture. I'm not saying don't pursue attractive business opportunities that could five X your money. If you're talking about a private business venture and you think it looks attractive, great, but don't convince yourself that there's no downside or risk. Anyway, ladies and gentlemen, that's the last TikTok for today's review video. Thanks for watching. I hope you found this video helpful. If you did, please make sure to like, subscribe, all that good stuff. It does help the channel tremendously. Let me know your thoughts on the tidbits of wisdom we gathered here today. Thanks again, and as always, be safe out there.