So we know what meme stocks are - how can it affect the market and long-term investors?
The real issue in the rise of meme stocks is that there is nothing keeping “memers” from targeting your stock. Today, more and more people are investing based on interest and speculation. This is largely due to the online meme community which circulates the built-up narratives around specific companies that they find particularly amusing.
What this means for long-term, index investors is that they should take caution – market prices today are less likely to represent fundamental values.
There is no need to worry right now, it's not looking that bad yet.
But if the market starts to look like the effervescence of a crisp Sprite from McDonald’s, and these hot stocks become unavoidable, you might want to consider making some changes.
Here at the Lance Hocutt Financial Group, we maintain our clients’ investment assets through a prudent process based on each individual’s risk, time frame, and overall goals. Although we’re not opposed to individual stock-picking, we encourage diversification in our portfolios to minimize the volatility and the risk that comes with attempting to gain wealth fast.