May 28, 2021 (Investorideas.com Newswire) Many vigilante investors who are being pulled into the social media frenzy to buy stocks could end up “financially burned”, warns the CEO of one of the world’s largest financial advisory and fintech organizations.
The warning from Nigel Green, the chief executive and founder of deVere Group, comes after shares of AMC jumped almost 40% Thursday as investors on the popular Reddit WallStreetBets board were once again pushing the stock in a bid to hurt short-sellers who have bet against the theater operator.
It follows similar moves that started in January when activist investors on Reddit pumped other out-of-favor firms including GameStop and BlackBerry.
Mr Green says: “There’s a certain vigilante mindset amongst those traders being drawn into this social-media frenzy to pump certain stocks.
“They seem to believe they’re in a David and Goliath-style battle against Wall Street and, judging by some of the comments on the forum, it appears kind of personal.
“They’re behaving like activists, not investors. Frankly, those pushing these stocks don’t seem to care about it going up – instead they’re out to destroy the sellers.”
He continues: “Heightened emotions, hype and hysteria and investing are rarely good bedfellows. I can’t help but think this is likely to end in tears for many activist traders.”
These forums have tapped typically inexperienced, younger people who might not necessarily have “the financial resources to be resilient against usually highly speculative and volatile investments” says Mr Green.
“Extreme caution should be exercised before joining stock frenzies of this nature. The valuations can be expected to be wild – in both directions – and there’s a legitimate risk that novice investors could face a financial hit.”
Previously he has warned: “I would avoid piling into stocks pumped by social media influencers.
“If you do want the thrill or novelty of chasing big gains, you really should ensure that you have a sound, diversified, long-term plan beforehand.
“There’s a major difference between investing and gambling.”
The deVere CEO concludes: “This kind of speculative day trading is becoming a global phenomenon. I don’t think this is a fad.
“However, in order to create, grow and safeguard wealth consistently to reach your long-term goals – which for most people is financial security and freedom – there’s no substitute for independent, professional, personal advice.
“Balanced advice should be at the heart of the decision-making process – and then proceed as you wish.”
e: [email protected]
t: +44 207 1220 925
deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients. It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.
This news is published on the Investorideas.com Newswire – a global digital news source for investors and business leaders
Disclaimer/Disclosure: Investorideas.com is a digital publisher of third party sourced news, articles and equity research as well as creates original content, including video, interviews and articles. Original content created by investorideas is protected by copyright laws other than syndication rights. Our site does not make recommendations for purchases or sale of stocks, services or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investing involves risk and possible losses. This site is currently compensated for news publication and distribution, social media and marketing, content creation and more. Disclosure is posted for each compensated news release, content published /created if required but otherwise the news was not compensated for and was published for the sole interest of our readers and followers. Contact management and IR of each company directly regarding specific questions.
More disclaimer info: https://www.investorideas.com/About/Disclaimer.asp Learn more about publishing your news release and our other news services on the Investorideas.com newswire https://www.investorideas.com/News-Upload/ and tickertagstocknews.com