in response to a weekend Reddit post from Keith Gill — the man who inspired 2021's meme stock mania — that appeared to indicate a significant holding of GameStop common shares and call options.
It's not an illegitimate feeling, he says. And of course, if you time a speculative trade exactly right, you could earn big profits. But when the price of an asset far exceeds its underlying the value, eventually people no longer want to pay for it. "People get more and more risk tolerant as the market gets more and more risky," he says."Risk tolerance is not a static personality trait. It's actually pretty dynamic."
That's compounded by the fact that this particular run-up has a"leader" in Gill, says Klontz."The last people who listened to him and ran in the direction he ran had the potential to make some money," he says.Even if everyone online appears to making tons of money wheeling and dealing shares of stock, the reality is less glamorous, says Klontz.
"You might go in and buy some shares of GME without knowing what the company is worth. You're just hoping that other people will buy it and make the price go up," he says."You probably have no discipline whatsoever as to when to sell. Because once you start making a little bit of money, guess what you want? More."Ideally, you manage your finances based on your specific goals for the future.
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Source: CNBC - 🏆 12. / 72 Read more »