He lost thousands on the stock market. Here’s the expensive lesson he learnt about taking investment tips
Wednesday, 14 January 2026
Brian*, a young Aucklander in his early 30s, had reached the stage in his career where he had some decent disposable income and decided it was time to invest beyond his mortgage and KiwiSaver.
A long-time friend mentioned he had some success investing in Australian stocks, ranging from traditional mining companies to more unconventional cannabis firms, which had only recently hit the market.
The friend was optimistic about the cannabis firms because of the success Canadian organisations like Canopy Growth were enjoying at that moment.
Brian decided to follow this tip and invested a few thousand dollars in an Australian firm, believing it would go on the same trajectory.
Initially, things went well and the stock lifted, leading to Brian tipping in a bit more money.
However, this didn’t last. The stock started to slide, but Brian didn’t panic initially. He thought it was a good opportunity to buy cheap and benefit from future gains and increased his stake to around $3500.
Those gains never came – and the stock was eventually delisted, leaving all investors empty-handed.
A little older and little wiser, Brian reflects on this now and understands that he wasn’t investing at all. He was actually gambling in a highly speculative area, rife with uncertainty.
If any good has come from this, it’s the powerful impact this mishap had on changing his perspective on how to build wealth in the longer term.
The price of accessibility
Brian’s feeling of shame at having been roped into the hype cycle of what turned out to be nothing more than a momentary bubble is more common than we realise.
The accessibility provided by new investing platforms has changed the way we invest, but there’s also been a significant development in who young people are most likely to trust or rely on for their investing advice.
Research conducted by the Financial Industry Regulatory Authority in the United States found that advice from friends and colleagues is cited as an important source of information for 85% of investors under the age of 35. In the same study, 61% of these young investors also said they were using social media as a source for investment information.
It turns out that Brian’s friend isn’t the only influential advice-giver currently floating around.
Further research by influential finance publication The Motley Fool shows Gen Z (those born between 1997 and 2012) is the only generation to explicitly value Reddit discussion and YouTube reviews over traditional financial news websites or brokerage blogs.
Read more by Damien Venuto:
The real clincher in this trend comes from an additional 2025 study from Credit Karma, which showed that men were 1.5 times as likely as women to act on advice they saw on social media.
This means that young male investors are far more likely to engage in risky investment behaviours than women, with some of their behaviour shifting to gambling rather than investing.
So how is this working out for them?
The proof is in the numbers
The numbers tell a compelling story about how recognising risk is integral to investing.
Digital bank Revolut conducted a study in early 2025, which found that women on their platform outperformed men by 4% in terms of returns on their investments for the year 2024.
Women were more likely to make higher-quality decisions, were more risk-aware and less likely to engage in speculative short-term trading.
This last point is an important one, according to Harry Smith, a portfolio manager of international equities at Fisher Funds.
“Investors should avoid treating the share market like a casino by trying to predict what will happen in the next week, month or even year,” Smith told me.
“Shifting away from long-term investing into short-term speculation pushes investors closer to the types of risks associated with gambling.”
Patient, long-term investors who don’t continuously check their balances on a daily basis (as if it’s an online game) will reap better rewards.
“With betting there can only be one winner, but the share market does not have to be a zero-sum game, as many investors can benefit as equity markets tend to rise over time.”
Smith points to the example of the S&P500 (an index tracking the performance of the 500 biggest companies in the United States), which fluctuates from year to year but trends upwards over the longer term.
Tracking the S&P500 from 1950 through 2025, the returns made on an annual basis could be anything from +52% to -37% in a given year. However, when you look at that same time period over 20-year rolling periods, the returns range from +18% to +6%.
The point here is that a long-term investing view may not give you an outrageous +52% return every year, but it similarly won’t obliterate your portfolio by 37%.
The optimism gap
One thing to note in all this is that women tend to be less optimistic than men when it comes to economic matters.
Tracking consumer confidence data from 1990 to 2025, Westpac senior economist Satish Rancchod notes women remain less optimistic than men whether the economy is going up or going down.
The interesting thing underpinning this that the more conservative sentiment of women tends to offer a better gauge on how the economy is actually performing.
“Confidence among women is a slightly better indicator of how both GDP and employment will evolve over the next few quarters,” says Ranchhod.
“It’s a bit more mixed when it comes to inflation. Confidence among men is a slightly better indicator of changes in overall prices. However, women appear to have a better feel for how the costs of essentials will evolve.”
Ranchhod says that much of this comes down to the dynamic in the family context.
“One possibility is that in a lot of households, there’s one partner who is often in charge of the finances,” the economist says.
“In many (but certainly not all) cases that person is a woman. If you’re that person who is constantly managing the financial pressures your family deals with, you might have a better feel for how the economy is tracking.”
When you look at this optimisim gap alongside the fact that men are more likely to respond to things they see on social media, the risk-taking among male investors starts to make a bit more sense. If you have a combination of self-confidence in your ability and general optimisim about how things might turn out, you’re more likely to take a punt (which is probably also why men tend to be more prolific online sports gamblers).
Knee-jerk investments
AMP KiwiSaver boss Jeff Ruscoe says reactive investors who are driven by emotion will often hurt their long-term prospects.
“Diversified KiwiSaver funds, where most New Zealanders invest for their retirement, demonstrated just how powerful long-term investing can be when emotion is removed from the equation,” said Ruscoe.
“Over the past year, diversified funds delivered strong gains, and over three years the performance gap between disciplined investors and reactive ones has become stark.”
Investors who panicked and sold shares during US President Donald Trump’s Liberation Day announcement in April would have found out the hard way what it feels like to miss the recovery that often follows a market dip.
“The temptation to react to market volatility is always strong, especially when headlines are dramatic,” says Ruscoe.
“But the investors who benefited most in 2025 were those who stayed focused on fundamentals: diversified portfolios, long-term objectives and disciplined decision-making.”
This is ultimately the difference between investing and gambling.
How to know if you’re a gambling man
With so much online noise about memcoins, crypto, hot stocks and other opportunities, it can be difficult to separate the speculative junk from investments that can really improve your long-term financial position.
Katie Wesney, the head strategic coach at Enable Me, says it’s important to understand the difference between wealth-building from blind speculation.
“Wealth building means owning productive assets that create value over time, including businesses earning profits or properties generating income,” she says.
“Speculation means betting on price movements with nothing underneath. With investing, time is your friend because real value compounds. With gambling, you’re just hoping to sell before the crash.”
So much of this also comes down to how long you hold onto your assets. Most people don’t become wealthy fast. It’s a slow process, punctuated by rises and falls over time.
“Wealth building looks like holding diversified assets through, for example, KiwiSaver or index funds long enough that you’re rewarded for the risk, not trying to time the market,” says Wesney.
“You accept volatility as the price of long-term growth, not as a trading opportunity.”
*The name of the individual in this story has been changed to protect his anonymity.