Some investors may ask their brokers for trading advice. Young people consult the stars and the sky.
Stefaniya Nova, who goes by @blonderichwitch on TikTok, is a 25-year-old living in New York City who uses astrology, tarot and “intuition” to guide her daily trading.
“After scanning the market from 8:30 a.m. to 9 a.m. and choosing the stocks I’ll be trading that day (today it was Amazon), I draw one card to confirm my decision or get guidance,” she says in a video. “Today I drew the Ace of Cups, which represents abundance; this gave me the necessary certainty to trust my strategy.”
The process seems to be working for her. On the next slide of her TikTok, Nova posts a screenshot of her portfolio from that day, showing a gain of almost $300 from trading Amazon stock. “21% return in 8 minutes by trusting my high self:heart:,” she writes. In another video, she posts a screenshot of her monthly earnings of almost $6,000.
Nova is one of many TikTokers who attribute their financial success to their faith in the universe, such as touting techniques using lunar cycles Buy Bitcoin and make astrology $440,000 in crypto trading. While this practice is far-fetched compared to the conventional strategies of sophisticated investors, it sits at the intersection of Gen Z’s love of atmosphere and financial freedom.
“It’s a new way to make money,” Nova said Fortune. “New possibilities for people: that you no longer have to work so hard these days. Work smarter not harder.”
Following the stars has worked out for Nova. She quit her job as a tarot reader and astrology consultant this year to take up day trading. She found it to be a more consistent income stream, making about $5,000 a month. But that doesn’t mean it’s a good idea for everyone, an expert warns.
“In financial markets, you shouldn’t be making decisions based largely on perceptions of things,” says Samuel Hartzmark, professor of behavioral finance at Boston College’s Carroll School of Management. Fortune.
He added: “If this stuff really did predict higher returns, then there are a lot of market participants who would probably use it as signals in their portfolios.”
It’s written in the stars
Nova shrugs her shoulders at those who think differently. Some people find success by looking at candlestick charts of the market. She can do the same by looking at a deck of cards and planetary alignments.
“Everything in the world is a cycle: the stock market, the seasons and astrology,” Nova said. “As I started getting more into astrology, into tarot, into intuition, all of that, I saw the correlation that I’m not the only one affected by these energetic influences.”
For example, Nova said Friday that it would not make trading decisions at 1 p.m. because the moon was in an empty phase, meaning the moon was not associated with a particular constellation and had no influence on other celestial bodies. You should avoid making decisions during these periods, Nova said. Instead, she waited an hour, after which the moon was in Virgo. After checking the market and making a preliminary decision on a trade, Nova will confirm her decision and ask herself the question: “What is best for you in your soul?”
Hartzmark, the professor, says he doesn’t endorse astrology and tarot as a day trading strategy, but understands why people gravitate toward them.
“The illusion of control,” he said. “Financial decisions are complicated and scary.”
Choices related to money are different from other choices people make every day, he explained. The options are overwhelming, causing people to turn to any form of guidance available to gain clarity. Oversimplifying logic about which stocks to day trade is one way to do this, as illustrated by the theory that stock picking monkeys could perform just as well as sophisticated investors due to the market’s inherent inconsistency. For example, you shouldn’t buy Apple stock just because you like the iPhone, Hartzmark argued. Stock buying decisions, especially when day trading, should instead be based on knowing something that other traders don’t know, or on having evidence that the iPhone is more valuable than what the market has priced it for.
“A lot of fads and vibes and things like that are really just similar examples of, ‘This sounds like a good story,’” Hartzmark said.
Gen Z, young people completing their studies and finding their way in the professional world, are particularly vulnerable to these trends, he added.
Warding off bad vibrations
Of course, the desire to take control of their uncertain future is one of the main reasons why Gen Z fell in love with investing in the first place. Driven by the fear of missing out and the determination to do so escape the corporate rat raceAccording to figures, more than 70% of the generation owns shares NASDAQ, more than previous generations at the same stage of life. With apps like Robinhood at their fingertips, Gen Z also has the tools to invest cheaply and easily, catapulting them into trading earlier than older generations.
Joyee Yang, 25, a financial influencer with more than $150,000 in assets and 131,000 followers on TikTok, shared Fortune she turned to the stock market to become financially independent after being kicked out of her parents’ home at age 19, forcing her to move into an apartment with three roommates.
“I learned very quickly that, damn, I’m alone in this world, and I either have to make more money or make my money work for me,” she said.
Yang believes she shares the attitudes of many members of Generation Z, who are seeking financial stability in a landscape they see as largely unstable. According to an April report, only 30% of the generation is optimistic about the economy report from ID verification platform SheerID, with more than 70% feeling the need to stretch budgets or hunt for discounts. Investing, Yang argued, is a way to alleviate that panic.
“Generation Z is starting to see the light at the end of the tunnel,” Yang said. “They’re not completely on their own, or they don’t have to work for every dollar they earn.”
While financial influencers like Yang have shared their investing success stories online, greater access to stock trading platforms and the rise in online talk about investments has also led to a lot of misinformation. Research platform WallStreetZen found that nearly two-thirds of StockTok videos, or stock-related videos on TikTok, were misleading. a January report. Those videos received 21.5 million likes and 194 million views.
Patterns of the universe
But TikTok and Gen Z didn’t come out of nowhere with distorted ideas about investment strategies. There is, in fact, historical precedent for StockTok’s vibe-based day trading wisdom.
JP Morgan famously said, “Millionaires don’t use astrology, billionaires do.” Even the American financier relied on the stars to guide his decisions: Rumor has it he canceled his planned trip on the Titanic at the last minute because his astrologer warned against it.
William Delbert Gann, an investor who made his fortune in the early 20th century, became famous for using astrology, ancient mathematics and geometry to inform his business decisions. From certain angles, Gann claimed to predict market trends and identify the perfect time to buy stocks. His graphs are still accessible todayalthough the validity of his philosophy is hotly disputed.
“After extensive research and investigation of the known sciences,” Gann said an interview from 1909“I discovered that the law of vibration allowed me to accurately determine the exact points at which stocks or commodities should rise and fall within a given time.”
If you look at the correlation between with the decline of the Dow Jones Industrial Average and the days of total solar eclipses, you could forgive Gann – for a moment – for his eccentric ideals. On or shortly after five of the seven total solar eclipses visible in the U.S. since 1932, the Dow Jones fell, according to an Axios analysis. Of course, there is another, less progressive explanation: the economy is often affected by eclipses, as people travel to witness the event. disrupt travel and usual spending behavior.
Hartzmark is still not convinced of Gann’s dogma. Guys like Gann are sometimes tied to success, he said, simply because the base rate of success for day trading is so low to begin with. A 2004 study that Hartzmark still cites, from researchers at the Graduate School of Management at the University of California, Davis, and National Chengchi University in Taipei, Taiwan, found that of 130,000 individual investors, more than 80% lost money in practice. The few who made money did not do so consistently.
Because the odds of success in day trading are already so small, you can’t attribute success solely to advanced investment strategies, Hartzmark argued. Some of it will be luck and circumstances. For the few who become wealthy using unconventional strategies, it is easy to attribute wealth to it. It is a phenomenon that has existed for hundreds of years.
“The psychology here is nothing new,” he said. “How it manifests is a little different due to technological changes and things like that, but I don’t think Gen Z deserves a particularly bad reputation.”
