As summer draws to a close, many of us will be looking back fondly on balmy days at the beach. For me, it’s also a time of celebration: our youngest is about to start reception. That milestone brings both joy and financial relief – no more nursery fees!

So what to do with this “windfall”? My financial adviser was clear: one of the best bangs for your buck is topping up your pension. So that’s what I’ll be doing – choosing compounding over Cornettos.

And there’s definitely one thing I won’t be doing, following investment tips on social media.

The Financial Times recently reported on a wave of “pump and dump” scams hitting small US-listed Chinese stocks. Companies like Concorde International, Ostin Technology and Pheton Holdings all surged after being hyped in WhatsApp groups and on social media. Then, almost overnight, they collapsed, falling more than 80% in a matter of days.

The losses were real. Investors saw $3.7bn wiped away in weeks. Victims included everyone from first-time traders to experienced professionals. The FBI says complaints about this kind of fraud are up 300% year-on-year.

It’s a powerful reminder of the dangers of FOMO, fear of missing out. Even the smartest people can get swept up in a story that looks like a quick win. But if it sounds too good to be true, it probably is.

Key takeaway

In life – and investing – there are no shortcuts. The route to financial freedom is built on consistency, persistence and a long-term mindset. That’s why diversification across a multi-asset portfolio is so valuable. It’s not about chasing the latest craze, it’s about building resilience and steady growth over time.

So, when faced with the next “hot tip” or “can’t miss” investment, ask yourself: is this diversification, or speculation?

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This article is provided for general information purposes only and should not be construed as personal financial advice to invest in any fund or product. These are the investment manager’s views at the time of writing and should not be construed as investment advice. The opinions expressed are correct at time of writing and may be subject to change. Capital is at risk. The value and income from investments can go down as well as up and are not guaranteed. An investor may get back significantly less than they invest. Past performance is not a reliable indicator of current or future performance and should not be the sole factor considered when selecting funds.