What GameStop Reminds Us

If you're a 'retail' investor (the term professional investors use, often condescendingly, to describe ordinary people investing in the stock market), you could be forgiven for wondering if everything you've ever learned about investing has been turned upside down.

Some thoughts you may have had in recent months:

  • Let me get this straight. A currency created as a joke and that you can't buy anything with has run up 500% in the first few months of the year?
  • So wait. Shares of bankrupt companies, where there's a 99% chance shareholders will be wiped out entirely, are trading in positive territory, and even having big daily rallies?
  • Now hold on--this hoodie sold for $26,000 because . . . because non-fungible token?
  • Somebody sold a pixel--a pixel!--for how much now?
  • An electric car manufacturer--no, not that one; it's one you've probably never heard of--is trading at a price/sales ratio of 10,000?

Perhaps being cooped up for so long has made us collectively crazy. Maybe some of this is just fads cycling in and out; maybe some of it is people at home bored in front of their computers and doing stupid things with their money. 

Whatever the reason these things are happening, your reaction should be to simply look on, bemused; resist that fear-of-missing-out (FOMO) feeling, and keep doing what you've been doing (assuming you've been saving and investing to the best of your ability).

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Image Source: Pixabay

Winning Isn't Everything--But It's Not That Hard

Maybe free trading commissions are partially to blame for this madness. But just because something is free doesn't mean you need it or should want it.

In fact, trading, while it may feel like you're 'doing something,' is generally detrimental to your results. You don't want to be a trader; you want to be an investor.

And being an investor means choosing a course and sticking with it. It doesn't mean chasing down the latest fads or hot tips. And it means tempering FOMO.

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