After the recent GameStop scandal rocked the way that young people view stocks, many students have entered the markets in the hopes of replicating the Reddit trend that left many Wall Street investors and hedge fund managers in awe. While investing can be a great opportunity for students to make money, it is important that we recognize the volatility of the stock market and how important it is to educate yourself before jumping into trends.
As GameStop’s stocks started to decrease in value, investors began short-selling their stocks to profit off the decrease. Noticing what was going on and believing that short-selling was unethical, hundreds of Reddit users on a forum dedicated to Wall Street called r/WallStreetBets bought pieces of GameStop stock at that low price, causing the prices to surge and investors to lose billions. The hedge fund investors were forced to pay back what they had borrowed and file for bankruptcy, causing prices to surge once again.
Following in this footstep, many people have been flocking to other stocks that have large amounts of short trades and replicating this action, causing hedge fund investors to lose billions once again and Wall Street to question whether this practice should be illegal and the public to question whether they should follow suit.
On the bright side of this scandal, many are learning that the stock market isn’t just a way for the rich to get richer and many young people have begun investing that have never before. Among these are college students.
Over the weekend, social media buzzed as people bought stocks in GameStop, AMC and Dogecoin in mass. However, AMC and GameStop’s stocks have fallen just as quick as they rose, and those who were hoping to stick it to investors and earn an extra buck are left with little reward as of now.
Stocks are complicated, and while some are hoping that these shares will increase back in price after this weekend’s dip, others are doubtful. Before buying into stocks, make sure that you study the share prices and are careful before throwing your savings into such a high-risk, high-reward scenario. While most college students cannot afford a financial advisor, studying trends and whether they are reliable before diving in to stocks can mean the difference between having savings and being bankrupt, as many are finding out his week as stocks settle at a much lower price than Redditors hoped for.