*Risks of investing in meme stocks*🐶🐸🐵🐱
Investing in meme stocks may feel like a way to get something out of social media, but before you proceed any further, make sure you know the risks. Buying meme stocks isn’t investing; it’s trading, and it closely resembles gambling from multiple angles.
*Here are some key risks to consider:*
Price performance may depend on investor sentiment. A meme stock that booms on social media can also go bust on social media, and quickly.
You might not time the market correctly. You may think that you’re “buying the dip” or executing some other savvy trading strategy, but no one can predict the future, and your timing might be off.
Market liquidity isn’t guaranteed. A meme stock’s trading volume may rapidly decrease, leaving you stuck holding the proverbial investment bag.
You’ll also want to make sure that your decision to buy a meme stock isn’t driven by FOMO (fear of missing out). That’s a type of emotional buying that may cause you to make decisions you’ll regret.
Because speculative assets like meme stocks, penny stocks, and meme coins are so often the target of pump-and-dumps and rug pulls, you may be wondering whether any exposure to these assets is advisable.
