Do This Instead of Gambling on Stocks like GameStop

Some of the links in this post are from our sponsors. We provide you with accurate, reliable information. Learn more about how we make money and select our advertising partners.

The stock market can be a wild ride, and super confusing. Just for an example, what are we supposed to learn from the recent case involving GameStop?

The chain of video game stores has been struggling for a long time. But in January 2021, the company’s stock price skyrocketed up by 1,500%. Then it plunged back down to earth.

Some investors made a fortune. Others lost a fortune. And it all happened thanks to a weird mix of Reddit stock traders, hedge funds, short sellers and thousands of individual investors — people like you.

What should we take away from this? We asked Robin Hartill, a certified financial planner and a senior writer at The Penny Hoarder. Here’s what she says:

1. Don’t Invest Based on Emotion or FOMO

The GameStop stock mania was partially fueled by investors’ FOMO — fear of missing out. Thousands of investors didn’t want to miss out on the possibility of huge profits, and a lot of those same people ended up losing money in the end.

“Ask anyone who’s built wealth and wasn’t born rich how they did it. They probably won’t tell you a story about taking short positions or buying $2 stocks,” Hartill says. “No matter how they feel about Wall Street, they’d no doubt tell you not to make investing decisions based on emotion.”

2. Start Early — Buy and Hold

So how did those investors build wealth?

“Most likely, they’ll tell you that they started investing early,” Hartill says. “They’ll stress consistency and long-term investing over day trading.”

In other words, don’t try to “time the market.” Just start investing and keep investing over the long term. That’s how you build wealth.

Over the long term, investing in the stock market will get you an average annual return of 7%, adjusted for inflation, according to authorities such as the U.S. Securities & Exchange Commission.

Don’t know where to start? With an app called Stash, you can get started with as little as $1.* You can invest in pieces of well-known companies, such as Amazon, Google, Apple and more. You’re able to invest in fractions of shares, which means you can invest in funds you wouldn’t normally be able to afford.

3. Learn to Do Your Own Research on Picking Stocks

Hartill recommends budgeting a certain amount of money to invest each month, no matter what.

We like Stash because it lets you choose from hundreds of stocks and funds to build your own investment portfolio. But it makes it simple by breaking them down into categories based on your personal goals.

Want to invest conservatively right now? Totally get it! Want to dip in with moderate or aggressive risk? Do what you feel.

It takes two minutes to sign up, and it’s totally secure. Subscription plans start at $1 a month.** Plus, when you use the link above, Stash will give you a $5 sign-up bonus once you deposit $5 into your account.

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He’s a long-term investor who’s never owned any GameStop stock.

*For Securities priced over $1,000, purchase of fractional shares starts at $0.05.

**You’ll also bear the standard fees and expenses reflected in the pricing of the ETFs in your account, plus fees for various ancillary services charged by Stash and the custodian.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.



source https://www.thepennyhoarder.com/investing/safer-than-meme-stocks/?aff_id=178&aff_sub3=MainFeed__investing/safer-than-meme-stocks/

Comments

Post a Comment

Popular posts from this blog

These Coconut Oil Uses Are for the Kitchen, Bathroom and Beyond

Image
I first discovered coconut oil several years ago when a health-focused grocery store opened in my neighborhood.  While I originally bought it for cooking, I quickly found many ways I could use it around the house. Now, I use so much that I invest in giant vats from Costco to save money; an 84-ounce tub costs $15.99 and typically lasts me four to six months. If you’re new to coconut oil, you’ll be surprised at just how adaptable this once-unknown ingredient can be. Ways to Use Coconut Oil That You Probably Haven’t Thought Of In the Kitchen The first use you probably think of for coconut oil is cooking. I most often find Indian recipes that call for this oil, but I’ve used it in a variety of dishes ranging from curries and stir-fries to granola and muffins. There’s some controversy surrounding the consumption of coconut oil because of its high saturated fat content. According to Harvard Medical School , coconut oil has more saturated fat than butter or lard — about 90%. Satu...
Read more

29 Road Trip Tips for a Fun and Frugal Vacation

Image
Cruising down the open road is a great way to get away from it all. Planning a road trip can be a cost-effective way to travel too — that is, if you do it right. The costs you’ll encounter on a road trip tend to sneak up on you, unlike the upfront sticker shock of a plane ticket. But no worries — there’s a lot you can do to save money on a road trip. 29 Cost-Saving Road Trip Tips 1. Consider Road Tripping With a Friend or Two Traveling solo has its benefits, like not putting up with someone else’s music for hours on end. But taking a road trip with others means you’ll have someone to split the costs of expenses like gas and lodging. You can literally cut your costs in half by road tripping with a friend. It’ll also make the long distance driving more bearable. Just make sure it’s someone you can tolerate being cooped up with for a long period of time. Also, discuss expectations for the road trip ahead of time so you’re both on the same page. You don’t want to wait until you’re o...
Read more

Credit Sesame Can Help Homebuyers Fix This Problem Before It Happens

Some of the links in this post are from our sponsors. We provide you with accurate, reliable information. Learn more about how we make money and select our advertising partners . If you’ve ever searched for a home to buy, you know the first step is mortgage pre-approval — and in today’s competitive market, you likely need to have it before you even put in an offer. But if you’re like one-fifth of Americans, an error on your credit report could mean banks could be scared of lending to you and won’t give you a pre-approval. And even if they do, it could be for an absurd loan rate that can cost you tens of thousands of dollars or more by the time you pay off the house — yikes. So if you didn’t see that roadblock coming, your dream house could be someone else’s before you have a chance to fix it. That’s why you need to make sure your credit report card is free of errors and your score is in tip-top shape before you even start Zillow-ing. A free website called Credit Sesame makes it s...
Read more