Don’t be your own “Tinder Swindler”: 5 lessons in love that you can apply to investing

In recent weeks, The Tinder Swindler has become one of the most popular films on Netflix. Following the Israeli fraudster Shimon Hayut, this gripping documentary shows how he used the dating app to con women out of millions of dollars. 

Claiming to be the heir to the billionaire Leviev family, you might be surprised that so few of his victims picked holes in Hayut’s story. Clearly, they had forgotten the adage that if something seems too good to be true, it often is! 

Of course, while this is good advice for love, it can be equally true when it comes to managing your finances, as we’ll see later. With this in mind, here are five lessons in romance that you can apply to investing. 

1. Don’t rush into things 

When it comes to investing, it can sometimes be difficult to dispel the fear of missing out. Of course, while rushing into a relationship can leave you with a broken heart, making a rash decision with your investments can have much more serious consequences.  

If you want to invest your wealth as effectively as possible, it’s important to avoid making impulsive decisions. For example, you may want to consider setting yourself a rule that you will wait 24 hours before buying or selling an asset, so you have time to think about your decision before you do anything. 

While it can be tempting to act on impulse with your investments, this is rarely the best decision. When looking to grow your wealth, it’s essential to be able to think clearly about things. 

2. Expect ups and downs 

Like any relationship, it’s important to remember that investments can experience both ups and downs. During major market shocks, such as the first national lockdown in 2020 or the recent outbreak of war in Ukraine, the value of your portfolio might fall, but it may also rise again. 

As easy as it can be to worry during difficult periods, try to bear in mind that the general upwards trend of markets usually negates the effects of any short-term dips. 

Just like you wouldn’t break up with a partner after a minor argument, it’s important to avoid panic-selling your assets during periods of volatility. An investment, like a relationship, is a long-term commitment that usually increases in value over time. 

3. Don’t live in the past 

As we often state, when it comes to investing, past performance is not a reliable indicator of future returns. Just because a particular investment or sector has seen strong growth before doesn’t mean it will again. 

When it comes to building a portfolio, it’s important to be able to make a properly informed decision and not just chase past returns. While you might get lucky, doing so is no guarantee that your investment will do well. 

If you’re tempted to invest in an asset or sector just because it has seen strong growth in the past, speaking to a financial planner can help you to decide whether that is truly the most suitable decision for you. 

4. If something seems too good to be true, it probably is 

Like in love, when it comes to investing, it can sometimes be important to trust your instincts if something seems too good to be true. There has been a rise in investment scams in recent years, which is why it’s essential to remain vigilant, so you don’t risk your wealth. 

According to a recent study by Aegon, low interest rates have encouraged many people to start investing their wealth. While it’s good to see so many people taking an interest in their financial future, the report also showed that high expectations of returns may leave people vulnerable to scams. 

The study noted that it was only when an investment promised a return of 10% or more that the majority of respondents became sceptical. If you want to avoid scams, it’s important to trust your gut instinct when a potential investment seems too good to be true.  

5. There are plenty of fish in the sea 

When you invest, not every asset will appreciate in value as much as you want it to. If an investment underperforms over a period of several years, it can sometimes be sensible to cut your losses by selling it and trying again. 

Just like how some people struggle to walk away from bad relationships, the psychological bias of “loss aversion” can make it difficult to sell a poorly-performing asset. However, while it can be unpleasant, holding onto a bad investment for too long can turn a small loss into a large one. 

Like with breakups, sometimes the best thing you can do is to bite the bullet and move on. 

Get in touch 

If you want to help ensure that your investments are on track to reach your life goals, we can help. Please email us at advise-me@fosterdenovo.com or call us on 0330 332 7866 to speak to one of our team. 

Please note: 

The information within this article is for informational purposes only and should not be considered advice. We suggest you seek advice from an independent financial adviser. The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.