Manic Stock Trading

Stock trading on wallstreetbets

Wow! Just in time for my very first post on our new Blog, an army of small retail traders couldn’t have given me a better topic to write about. GameStop. AMC Entertainment. Express. These familiar company names are creating a buzz on just about every news and social media site you can imagine. A large group of retail traders from Reddit’s wallstreetbets forum continue placing speculative options and stock trades that are driving these stocks into the stratosphere.

Should I buy this stock?

I get asked this question a lot when stock fever hits as it did recently – should I buy one of these stocks? In the long run, this type of stock mania isn’t usually sustainable over time because inevitably some investors transition from greed to fear. As they start pulling their money off the table, they can trigger an avalanche of selling that eventually brings the stock back down to earth. Through years of investing for myself and others, I’ve seen that the faster a stock rises higher and higher, the quicker and harder it can fall. And you don’t want to be the last one out.

Don’t get caught up in the frenzy

As an investor who has survived several market bubbles – when over-speculative market froth drives normally rational people to do very irrational things like in 1999. My son’s friend’s mom started day-trading her 401k – my best advice is to NOT get caught up in the frenzy, as difficult as it may be to resist. As investors, one of our biggest challenges is to mute (but not ignore) our emotions and stay focused on the things that we have some control over. For example, the amount of money we want to have at risk, the amount of time we want that money invested, and the goals we have with that money. Also, what type of investments we’re comfortable owning, and what conditions we’ll use to determine when and at what price we’ll exit our trades.

If you’d like a seasoned and certified financial planner to look over your investments for a sanity check, give me a call at 253-858-2427 or click on the Contact Us page to schedule a no-obligation 30-minute review -Crystal