*Risks of investing in meme stocks*đ¶đžđ”đ±
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 isnât investing; itâs 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 youâre âbuying the dipâ or executing some other savvy trading strategy, but no one can predict the future, and your timing might be off.
Market liquidity isnât guaranteed. A meme stockâs trading volume may rapidly decrease, leaving you stuck holding the proverbial investment bag.
Youâll also want to make sure that your decision to buy a meme stock isnât driven by FOMO (fear of missing out). Thatâs a type of emotional buying that may cause you to make decisions youâll 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.