As a matter of principle I've never invested in shares, or traded, because one is supporting a system where the people who work in the company don't own it, and those who own it don't work in it - (senior management share-holdings excepted) - thereby setting up an eternal conflict of interest between 'workers' and 'owners'; ie: I am in basic disagreement with the Capitalist system. However the irony is my pension comes from such investments. :)
As an alternative, I invest in bricks & mortar, land, and wood-working equipment so I can make stuff.
This highly relevant topic has touched most of us, even if it hasn’t necessarily led to addiction for everyone. As someone who now invests 98% of my portfolio in index funds, I can reflect on my journey and how I’ve observed this phenomenon evolve. I used to invest in individual stocks for a few years, but I realized it wasn’t for me—it demanded too much of my time and mental energy. Shifting to a long-term, passive investment approach remains among my best decisions in the last two decades. That said, I don’t believe there’s a single cause for the growing addiction to trading and gambling-like behaviors in today’s markets. Below are my observations, some of which overlap with the points made in this post, while others expand on them:
1. The Desire to Get Rich Quickly: The aspiration to achieve wealth has always existed, but today’s trading apps amplify it to an unprecedented degree. These platforms, designed with gamified elements—real-time alerts, confetti animations for trades, and seamless one-click purchasing—encourage impulsive behavior similar to Amazon one-click buying. When the stock market trends upward, as it has for much of 2023 and 2024, it becomes even more tempting to chase quick gains. Watching your portfolio grow rapidly during these bull runs feeds into the belief that wealth creation can and should be immediate.
2. The Influence of Social Media and Unqualified Financial Advice: A Wall Street Journal article noted that many Gen Z investors get financial advice from social media influencers, most of whom lack formal financial education or expertise. These influencers often glamorize stock picking over index funds or ETFs, further fueling the culture of speculation. For many young investors, following this advice becomes a social activity, leading to risky behaviors without fully understanding the consequences.
3. Index Funds - Boring but Effective: Investing in index funds or ETFs is often seen as “boring” because it doesn’t provide the same excitement as discussing a hot stock pick. Nobody brags about their slow-and-steady index fund strategy at social gatherings, but buying and boasting about stocks like Nvidia can make you feel like part of an exclusive club. This social dynamic makes it harder for people to stick to disciplined, long-term investing.
4. FOMO and the Thrill of Meme Stocks: Fear of Missing Out (FOMO) plays a massive role. Meme stocks and speculative trading create a sense of excitement and community, keeping people glued to markets. This addictive cycle becomes even more pronounced during periods of market growth, such as the second half of 2020, all of 2021, and again in 2023 and 2024. For many, it feels like the market only goes up, and even when it dips, it recovers quickly. This perception reinforces the illusion that trading is a foolproof way to make money.
5. The Financial Industry’s Incentives: The industry has a massive financial incentive to encourage frequent trading. High trading volumes generate profits for brokers through spreads, fees, and even practices like front-running orders. The media also plays a role by constantly hyping stocks, technologies like AI, and other speculative trends, creating a narrative of winners and losers that drives impulsive decision-making. Predicting outcomes in a complex market is nearly impossible, but the media capitalizes on the illusion that it can be done.
6. ETFs vs. Mutual Funds: I’ve written before about how ETFs, while a good financial innovation (https://klementoninvesting.substack.com/p/why-retail-traders-underperform/comment/80884118), can inadvertently encourage overtrading. Unlike mutual funds, which settle at the end of the day and thus give investors time to reflect, ETFs can be traded in real-time, like stocks. This flexibility makes it harder for investors to avoid emotional reactions to market fluctuations. The constant temptation to buy or sell based on short-term trends undermines the long-term discipline that mutual funds implicitly encourage.
7. The Perfect Lives on Social Media: Social media often portrays a distorted reality where everyone seems to succeed effortlessly. Spending too much time in these spaces can lead to feelings of inadequacy and impatience. The slow, steady approach of saving and investing over 30-35 years doesn’t feel glamorous compared to the instant gratification promised by speculative trading, betting on sports, or even buying lottery tickets.
8. A Lack of Financial Education: Schools and colleges rarely teach personal finance or investing, leaving most people unprepared for the realities of building wealth. Without this foundational knowledge, many begin their careers without understanding that financial independence is a marathon, not a sprint. This knowledge gap makes people more vulnerable to the allure of quick wins in the market.
9. Selective Storytelling by “Successful” Investors: Most investors on platforms like CNBC or social media only discuss their successes, conveniently leaving out their losses. This creates a skewed perception, leading others to believe that picking a few winning stocks is all it takes to achieve financial freedom. Identifying those winners consistently is incredibly difficult, but these challenges are rarely acknowledged in public discussions.
10. Historical Parallels: Addiction to the Noise: This addiction to real-time market updates and trading is not new. Robert Greene captures this perfectly in his quote about the 1929 Wall Street crash, where the sound of the ticker tape became a physical addiction for many. Today, the ticker tape has been replaced by the constant pings of notifications and the “always-on” news cycle. This instant access to information creates a sense of urgency and impatience that spills over into other aspects of life, eroding attention spans and increasing impulsivity.
All these factors—some more prominent than others—contribute to the growing addiction to trading and speculative markets. None of this is new, but today's tools and platforms have amplified these tendencies to a scale we haven’t seen before. As your post highlights, this addiction is not just an individual issue but a systemic one with profound societal consequences.
The full Greene quote:
“Ticker tape fever. During the run-up to the 1929 crash on Wall Street, many people had become addicted to playing the stock market, and this addiction had a physical component—the sound of the ticker tape that electronically registered each change in a stock’s price. Hearing that clicking noise indicated something was happening; somebody was trading and making a fortune. Many felt drawn to the sound, which felt like the heartbeat of Wall Street. We no longer have the ticker tape. Instead, many of us have become addicted to the minute-by-minute news cycle, to “what’s trending,” to the Twitter feed, often accompanied by a ping that has its narcotic effects. We feel connected to the flow of life, events as they change in real-time, and other people following the same instant reports. This need to know instantly has a built-in momentum. Once we expect to have some bit of news quickly, we can never go back to the slower pace of just a year ago. We feel the need for more information more quickly. Such impatience tends to spill over into other aspects of life—driving, reading a book, or following a film. Our attention span decreases, as does our tolerance for any obstacles in our path.”
Well detailed and described. We're also 90% unconscious and so are led primarily by this and it begins to take over. The ticker tape sound and now the 'ping' are NLP anchors to keep us unconscious but fed small continual dopamine hits to keep us in the loop. And like all addictions it takes a huge amount of courage and will to become conscious.
As a matter of principle I've never invested in shares, or traded, because one is supporting a system where the people who work in the company don't own it, and those who own it don't work in it - (senior management share-holdings excepted) - thereby setting up an eternal conflict of interest between 'workers' and 'owners'; ie: I am in basic disagreement with the Capitalist system. However the irony is my pension comes from such investments. :)
As an alternative, I invest in bricks & mortar, land, and wood-working equipment so I can make stuff.
This highly relevant topic has touched most of us, even if it hasn’t necessarily led to addiction for everyone. As someone who now invests 98% of my portfolio in index funds, I can reflect on my journey and how I’ve observed this phenomenon evolve. I used to invest in individual stocks for a few years, but I realized it wasn’t for me—it demanded too much of my time and mental energy. Shifting to a long-term, passive investment approach remains among my best decisions in the last two decades. That said, I don’t believe there’s a single cause for the growing addiction to trading and gambling-like behaviors in today’s markets. Below are my observations, some of which overlap with the points made in this post, while others expand on them:
1. The Desire to Get Rich Quickly: The aspiration to achieve wealth has always existed, but today’s trading apps amplify it to an unprecedented degree. These platforms, designed with gamified elements—real-time alerts, confetti animations for trades, and seamless one-click purchasing—encourage impulsive behavior similar to Amazon one-click buying. When the stock market trends upward, as it has for much of 2023 and 2024, it becomes even more tempting to chase quick gains. Watching your portfolio grow rapidly during these bull runs feeds into the belief that wealth creation can and should be immediate.
2. The Influence of Social Media and Unqualified Financial Advice: A Wall Street Journal article noted that many Gen Z investors get financial advice from social media influencers, most of whom lack formal financial education or expertise. These influencers often glamorize stock picking over index funds or ETFs, further fueling the culture of speculation. For many young investors, following this advice becomes a social activity, leading to risky behaviors without fully understanding the consequences.
3. Index Funds - Boring but Effective: Investing in index funds or ETFs is often seen as “boring” because it doesn’t provide the same excitement as discussing a hot stock pick. Nobody brags about their slow-and-steady index fund strategy at social gatherings, but buying and boasting about stocks like Nvidia can make you feel like part of an exclusive club. This social dynamic makes it harder for people to stick to disciplined, long-term investing.
4. FOMO and the Thrill of Meme Stocks: Fear of Missing Out (FOMO) plays a massive role. Meme stocks and speculative trading create a sense of excitement and community, keeping people glued to markets. This addictive cycle becomes even more pronounced during periods of market growth, such as the second half of 2020, all of 2021, and again in 2023 and 2024. For many, it feels like the market only goes up, and even when it dips, it recovers quickly. This perception reinforces the illusion that trading is a foolproof way to make money.
5. The Financial Industry’s Incentives: The industry has a massive financial incentive to encourage frequent trading. High trading volumes generate profits for brokers through spreads, fees, and even practices like front-running orders. The media also plays a role by constantly hyping stocks, technologies like AI, and other speculative trends, creating a narrative of winners and losers that drives impulsive decision-making. Predicting outcomes in a complex market is nearly impossible, but the media capitalizes on the illusion that it can be done.
6. ETFs vs. Mutual Funds: I’ve written before about how ETFs, while a good financial innovation (https://klementoninvesting.substack.com/p/why-retail-traders-underperform/comment/80884118), can inadvertently encourage overtrading. Unlike mutual funds, which settle at the end of the day and thus give investors time to reflect, ETFs can be traded in real-time, like stocks. This flexibility makes it harder for investors to avoid emotional reactions to market fluctuations. The constant temptation to buy or sell based on short-term trends undermines the long-term discipline that mutual funds implicitly encourage.
7. The Perfect Lives on Social Media: Social media often portrays a distorted reality where everyone seems to succeed effortlessly. Spending too much time in these spaces can lead to feelings of inadequacy and impatience. The slow, steady approach of saving and investing over 30-35 years doesn’t feel glamorous compared to the instant gratification promised by speculative trading, betting on sports, or even buying lottery tickets.
8. A Lack of Financial Education: Schools and colleges rarely teach personal finance or investing, leaving most people unprepared for the realities of building wealth. Without this foundational knowledge, many begin their careers without understanding that financial independence is a marathon, not a sprint. This knowledge gap makes people more vulnerable to the allure of quick wins in the market.
9. Selective Storytelling by “Successful” Investors: Most investors on platforms like CNBC or social media only discuss their successes, conveniently leaving out their losses. This creates a skewed perception, leading others to believe that picking a few winning stocks is all it takes to achieve financial freedom. Identifying those winners consistently is incredibly difficult, but these challenges are rarely acknowledged in public discussions.
10. Historical Parallels: Addiction to the Noise: This addiction to real-time market updates and trading is not new. Robert Greene captures this perfectly in his quote about the 1929 Wall Street crash, where the sound of the ticker tape became a physical addiction for many. Today, the ticker tape has been replaced by the constant pings of notifications and the “always-on” news cycle. This instant access to information creates a sense of urgency and impatience that spills over into other aspects of life, eroding attention spans and increasing impulsivity.
All these factors—some more prominent than others—contribute to the growing addiction to trading and speculative markets. None of this is new, but today's tools and platforms have amplified these tendencies to a scale we haven’t seen before. As your post highlights, this addiction is not just an individual issue but a systemic one with profound societal consequences.
The full Greene quote:
“Ticker tape fever. During the run-up to the 1929 crash on Wall Street, many people had become addicted to playing the stock market, and this addiction had a physical component—the sound of the ticker tape that electronically registered each change in a stock’s price. Hearing that clicking noise indicated something was happening; somebody was trading and making a fortune. Many felt drawn to the sound, which felt like the heartbeat of Wall Street. We no longer have the ticker tape. Instead, many of us have become addicted to the minute-by-minute news cycle, to “what’s trending,” to the Twitter feed, often accompanied by a ping that has its narcotic effects. We feel connected to the flow of life, events as they change in real-time, and other people following the same instant reports. This need to know instantly has a built-in momentum. Once we expect to have some bit of news quickly, we can never go back to the slower pace of just a year ago. We feel the need for more information more quickly. Such impatience tends to spill over into other aspects of life—driving, reading a book, or following a film. Our attention span decreases, as does our tolerance for any obstacles in our path.”
Well detailed and described. We're also 90% unconscious and so are led primarily by this and it begins to take over. The ticker tape sound and now the 'ping' are NLP anchors to keep us unconscious but fed small continual dopamine hits to keep us in the loop. And like all addictions it takes a huge amount of courage and will to become conscious.