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The stock market can be a crazy process and super chaotic. For example, what should we learn from the recent case involving GameStop?
The video game chain has been struggling for a long time. But in January 2021, the company’s share price soared by 1500%. Then it fell back to the earth.
Some investors made big fortunes. Others lost a lot of money. This is all thanks to a strange combination of Reddit stock traders, hedge funds, short sellers and thousands of individual investors-people like you.
What should we get from it? We asked Robin Hartill, a certified financial planner and senior writer for The Penny Hoarder. She said this:
1. Don’t invest based on emotions or FOMO
Part of the reason for GameStop’s stock frenzy is the FOMO of investors—the fear of missing out on opportunities. Thousands of investors don’t want to miss the possibility of huge profits, and many of these people lose money in the end.
“Ask people who have accumulated wealth but are not born rich how they did it. They may not tell you stories about short positions or buying $2 stocks,” Hartier said. “Regardless of their views on Wall Street, they will undoubtedly tell you not to make investment decisions based on emotions.”
2. Start early-buy and hold
So how do these investors accumulate wealth?
“Most likely, they will tell you that they started investing very early,” Hartier said. “Compared with day trading, they will emphasize consistency and long-term investment.”
In other words, don’t try to “seize the market opportunity.” Initial investment and long-term investment. This is how you accumulate wealth.
According to data from the US Securities and Exchange Commission and other authorities, in the long run, investing in the stock market will bring you an average annual rate of return of 7%, adjusted for inflation.
Don’t know where to start?Use the name Tibetan, You can start using it for only $1. * You can invest in some well-known companies, such as Amazon, Google, Apple, etc. You can invest in a small portion of stocks, which means you can invest in funds that you can’t normally afford.
3. Learn to study stock selection by yourself
Hartill suggested that, in any case, a certain amount of funds should be budgeted for investment every month.
We like Stash because it allows you to choose from hundreds of stocks and funds to build your own investment portfolio. However, by dividing them into categories based on your personal goals, it makes things simple.
Want to invest conservatively now? Fully understand! Want to participate with moderate or aggressive risk? Do what you feel.
Takes two minutes Sign up, And it is completely safe. The subscription plan starts at $1 per month. ** In addition, when you use the above link, once you deposit $5 into your account, Stash will give you a $5 registration bonus.
Mike Brasfield ([email protected]) Is the senior writer of The Penny Hoarder. He is a long-term investor who has never owned any GameStop stock.
*For securities with a price of more than $1,000, the starting price to purchase fractional stocks is $0.05.
**You will also bear the standard fees and expenses reflected in the ETF pricing in your account, as well as various ancillary service fees charged by Stash and the custodian.
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