How to Change Somebody’s Mind About Investing

A reader writes in, asking:

“How do you convince somebody that they are making a bad investment decision? A member of my family often brags about his latest money move. Apparently he is always getting in or out of a stock at just the right time or making an options bet that paid off. I’m sure we are not hearing about all the bets that DONT pay off. But none of this seems like actual prudent investing…not even remotely.”

I usually don’t even try. If somebody is telling me about their investments, I just listen, unless they explicitly request my opinion. And even then, my standard reply is just, “I don’t follow or invest in [individual stocks/Bitcoin/gold/options/whatever] at all. I’m just a boring index fund investor.” That is, I am open about what I do with my own money, but I don’t try to convince them that they’re making a mistake.

That’s not to say that I haven’t tried. I used to. Given my line of work, it’s pretty common for friends/family/acquaintances to ask my opinion about a particular investment decision they’ve made. But what I found over the years is that in most cases, the other party’s only goal for the conversation is to be congratulated on having made a smart decision. They don’t actually want or care about my opinion, unless that opinion is, “great job!”

There have been occasions on which the other party was in fact seeking to have a conversation about the pros and cons of a particular investment strategy — and in such cases I’m happy to have that conversation of course — but that’s not the most common outcome.

And really, that’s just human nature. When was the last time that you had a conversation with somebody, in which they convinced you that a decision you were making was unwise and you decided to make a different decision going forward? It happens, sure. But not very often.

Personally, I find that when I change my mind about a topic, it’s usually because of something I have read rather than something somebody said. There’s something about sitting down to read a book (or a piece of research) that puts me in a mindset where I’m ready/willing to question and change my current views on the matter. I am certainly not in that same mindset when somebody starts providing unsolicited opinions about my life decisions.

So, if you’re looking to change somebody’s mind about investing, my best suggestion is to:

1. Lend them your copy of a book (e.g., A Random Walk Down Wall Street or The Four Pillars of Investing — or Bogle’s Little Book of Common Sense Investing if you suspect that the person would not read a longer book), and
2. Pitch the book in a subtle manner (e.g., “I was thinking about this book recently. It’s one of my favorites. And it occurred to me that you might really enjoy it as well, given your interest in investing.”) so that the other party does not feel defensive.

But even then, you have to be prepared for a scenario in which the attempt is entirely unsuccessful. It’s hard to change somebody’s mind.