Be Cautious of Fad Investing

Posted: August 9, 2017 in Social Commentary
Tags: , , ,

By R.C. Seely

IN THE NINETIES IT WAS BEANIE BABIES, a market that when it went bust financially, hurt many who had expected it to be a long term trend. The early 2000s gave us the “Tickle me Elmo” doll craze, that caused violence as determined consumers fought each other for their doll. Today we have similiar product–one that I myself have made a modest investment in–with the Funko Pop figures. Will this be the next Beanie Babies or a substantial investment opportunity? I don’t know, only time will tell. 

    Fashion in general would be considered a “Fad Investment,” you spend lots of money at times, for an article of clothing that you will only wear once or until the trend ends. Not because you don’t like it or it’s in a state of disrepair but because you have to follow the crowd, that has already moved on. Bell bottoms gave way to baggie jeans, which moved over for skinny jeans. I hate skinny jeans and now they are everywhere. Worse still, is the material used, a nasty denim/spandex mutant fabric. Where are the natural advocates when they are needed? The major criticism here is that the retailers are choosing to cater to a single demographic. Like most trends, the skinny jeans are pretty much guaranteed to be temporary but for now it is an inconvenience. I doubt I’m alone in the hatred of this fabric. 

    Electronics–like clothing–are practical to an extent but it’s easy to make it a Fad Investment when obsessively buying the newest smart phone or a 3D HD TV or computer that has a feature that you won’t even use. But you must have it! This mindset makes even practical purchases a Fad Investment. 

    A little common sense in your purchases can help you avoid Fad Investing. For starters, if you have to mortgage your home to “complete the collection” then you might want to rethink your financial strategy. Gold or silver are a far better bet and will always retain some value. Precious metals have been around for thousands of years after all. Both are used in electronics currently so it’s naive to think gold and silver won’t be a sound investment in the future. The only real downside is that because of fiat currency the value is more organic and can be manipulated. Cryptocurrencies such as Bitcoin are also a better investment than those skinny jeans or the “the next must have toy.” Another way to steer clear of the Fad Investing is only purchase practical items–clothing and electronics for example–when replacing another product or has a feature that will be used regularly. If the purchase doesn’t break the bank or has genuine benefit for you, then go ahead and get it. As for me, after losing 10 pounds from going to the gym everyday, it looks like I’ll just have to keep tightening my belt until the “flex skinny jeans” fad passes. 

R.C. Seely is the founder of americanuslibertae.com and ALTV. He has also written books on pop culture and his most recent Victims of White Male: How Victim Culture Victimizes Society is available at Amazon.

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