April 20, 2021
By Forbes Finance Council
Investing in the stock market comes with risks, especially in the age of social media. Valuable information that every investor should be aware of—including the occasional volatility of the stock market as well as investment nuances such as short selling—came into the spotlight recently when Redditors banded together to inflate the prices of retailer GameStop’s (GME) stock.
As well as serving as a refresher on stock market basics, the GameStop situation is also a signpost pointing to emerging trends in investment and fintech. Current and would-be stock market investors can take away some important lessons from this story. Below, 14 members of Forbes Finance Council share what every investor should learn from the GameStop stock saga.
Beware the power of groupthink.
This was less a David-versus-Goliath story than a lesson on the power of groupthink. Though many investors made life-changing amounts of money, many others found themselves without a chair when the music stopped. As boring as it may seem, understanding the fundamentals wins the day, not groupthink—especially when it’s driven by social media. - Catherine York Powers, Constant AI