Getting your financial advice from TikTok and Reddit? That could backfire

Getting your financial advice from TikTok and Reddit? That could backfire  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  VIEW IN BROWSER | SUBSCRIBE WED, FEB 03, 2021 YOUR WEALTH Editor's Note The social media driven day trading frenzy around GameStop was inevitable. The number of novice investors day trading has skyrocketed during the coronavirus pandemic, and that investment surge has created a huge rally in global equities. Basically, people are stuck at home, have some free time and have turned to playing the stock market on various trading platforms (especially millennials), hoping to hit some quick, big returns on their investments. Unfortunately, many of these stock market newbies suffer from fear of missing out and think day trading is a get-rich-quick scheme. It's not. Truth be told, day trading is hard work and is very risky. It's different from traditional investing and it's not for the faint of heart. A good friend who is a very successful day trader told me when you start out you need to know what you actually don't know. She said you need to recognize the learning curve and to question everything before making an investment. And that means not getting caught up in the hype. To that point, beware of any claims of hot tips from "experts." Relying on investment advice from day trading platforms, websites and other social media outlets can be hazardous to your financial health. If it sounds too good to be true, it probably is. Do your homework and research a reputable trading system. Once you find one, stick with it. Day trading isn't for everyone, and it takes a certain type of person to be able to handle the market's daily volatile rollercoaster ride. My friend also said she knows she has the temperament for day trading and knows herself as an investor and understands her risk tolerance. We have heard and read many stories about how day trading has made some people a lot of money in a short period of time. On the flip side, day trading has left many others with huge losses and placed them in bad financial shape. Those are the stories you don't often hear about. So, if you think you want to dabble with day trading, make sure you understand the risks, assess if you have the stomach to handle it and that you have the investment discipline that is required. And most important, only invest what you can actually afford to lose. For more key stuff like this, please follow me on Twitter @jimpavia and check out CNBC's Financial Advisor Hub and CNBC + Acorns Invest in You: Ready. Set. Grow. Jim Pavia @JIMPAVIA Getting your financial advice from TikTok and Reddit? That could backfire More people are picking up financial advice from platforms like TikTok and Reddit. But it can be hard to verify whom you're listening to, and if you should be. Is silver the next GameStop? Social media may fuel speculation Silver prices hit an 8-year high Monday, drawing comparisons to GameStop stock. There are similarities, but key differences may make investors more cautious. Short selling: What it is, why it's risky and how the 'squeeze' happens Short selling is an investment strategy that is common among hedge funds, yet qualified individual investors can use it, too. Here are the risks. Why the GameStop frenzy may hurt retirees along with hedge funds Retail investors wanted hedge funds shorting GameStop stock to lose money when they ran up the share price. Pension plans may be collateral damage. Op-ed: What Wall Street can learn and must fix from the GameStop fiasco It's not just the short-sellers that will get soaked in the GameStop short squeeze. The run-up in share prices can imperil financial markets themselves. Don't wait for another stimulus check to fix your finances: Take this 5-day money challenge now Here are five simple steps that you can take now to get a better handle on your money, whether another stimulus check is on its way or not. Here's how to boost your income and find creative ways to make money Whether it is starting a new side hustle, getting a raise or finding a different job, these strategies can help you get started. Americans are flocking to the suburbs — here's how much you need to earn to buy a house The pandemic-induced run on housing has fueled a national affordability crisis for many would-be home buyers. Republicans push for $1,000 stimulus checks. Here's who would qualify for the money A group of GOP senators is calling for a smaller stimulus package. That would include $1,000 stimulus checks, but fewer people would get the money. Silver stocks explode, most heavily shorted stonks, Vix spikes "Today on the Untitled Chart Show, JC Parets of All Star Charts and Downtown Josh Brown take a look at the biggest trends in the markets right now ..." CONTRIBUTORS Sharon Epperson @sharon_epperson Josh Brown @ReformedBroker Unsubscribe Manage Newsletters Terms of Service Join the CNBC Panel   Digital Products Feedback Privacy Policy CNBC Events   © 2021 CNBC LLC. All rights reserved. A property of NBCUniversal. 900 Sylvan Avenue, Englewood Cliffs, NJ 07632 Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes and Market Data and Analysis. Data also provided by THOMSON REUTERS