Are traders blindly following Donald Trump's posts?
One social media post from Donald Trump is currently enough to send stock markets around the world plummeting or soaring. A post on his own platform TruthSocial is currently particularly criticized because of the approach, according to experts could be classified as insider trading.
This is what happened: Shortly before Trump announced the news, his to suspend the tariffs that have just been imposed against various countries, he advised stock investing on TruthSocial with the words “Now is a great time to buy.” A short time later, the prices of many stocks rose significantly, only to fall sharply again the following day. One can only speculate as to who benefited from recent stock market events.
Studies have suggested in the past that risky financial investments could have parallels to gambling. With his erratic decisions and messaging, Trump could lead amateur traders to overestimate the impact of the president's words on markets - with high risks of loss.
Traders lost a lot of money on Trump coin
Shortly before his inauguration as President of the USA, Donald Trump launched his own cryptocurrency, $Trump. Even though analysts like Nigel Green from the deVere Group warned, that an investment in the meme coin is “more of a game of chance”. Demand initially rose rapidly, so that a $Trump was worth the equivalent of around NZ$70.
In the meantime, demand for $Trump has cooled down significantly and the cryptocurrency is valued at a price equivalent to less than NZ$0. It seems conceivable that many traders could have lost a lot of money due to the price collapse. Trump himself is said to have earned a three-digit million sum from the deal. As the issuer of the meme coin, he could only win - like the house in casino games.
Similar to gambling, studies have shown that when it comes to trading, some people have the urge to win back the money they have lost. If the ups and downs on the stock exchanges and crypto markets continue like this, it could lead many traders to make risky decisions.
How investors should behave
Within a few months of taking office, Donald Trump showedigt that he can skillfully stage not only his political but also his economic power. Experts recommend that investors act prudently during this market phase and not fall for the temptation of a quick deal that might come with a presidential social media post.
Similar to gambling, setting yourself a monthly limit that you stick to consistently could be a good strategy. There is a risk of total loss, particularly with meme coins without a real business model, so the money invested should not be viewed as an investment, but rather as a stake.
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