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Proprietary Data Insights Top Mega, Large, And Mid Cap Stock Searches This Month
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Had You Invested $1,000 It’s no surprise that the top five tickers investors have been searching for most over the last month are a mix of big, well-established names – Tesla (TSLA), Apple (AAPL), and Amazon (AMZN) – and so-called meme stocks – AMC Entertainment (AMC) and Bed Bath & Beyond (BBBY). What starts with interest doesn’t always end in an investment. The Juice explores the ins and outs of two investing styles – that sometimes coexist – in a minute. But first… What if, at the start of 2021, you invested $1,000 in each of the top five stocks in our proprietary Trackstar database? Roughly how much money would you have now (as of earlier this week)?
Sitting pretty in three out of five of these stocks, even though, in our exercise, you missed selling at their respective highs. Sitting on unrealized losses in BBBY and AMZN. Except you probably would not have purchased BBBY at the beginning of 2021. However, there’s a better chance you would have added some AMZN to your portfolio. Our reasoning on why for both of those hypothetical decisions helps explain the two aforementioned investing styles. Scroll with us… |
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Investing |
Meme Stocks Or Mega Caps |
Key Takeaways:
So much of meme stock investing comes down to the fear of missing out (FOMO) and the idea that you gotta take some chances with your money if you want a crack at once-in-a-lifetime returns. You only live once. YOLO. We saw these phenomena grip untold numbers of people during the stay-at-home portion of the pandemic. While it worked out well for lots of people, others got hurt. Maybe they bought the top. Sold too soon. Or simply mistimed things one way or another. As we have seen this month with BBBY, meme stocks aren’t going away. This can be good. This can be bad. Doubling Down When you double down on a stock, you add more money to a losing trade, hoping it will retrace its steps to breakeven or even profitability. There’s something psychologically comforting about lowering your cost basis. You purchased 100 shares of a $5 stock. Suddenly, it trades for just $2.50. You buy 100 more shares. You lowered your cost basis from $5 to $3.75 per share. You’re still in the fight. Psychologically comforting maybe. But not always a sound strategy, particularly on a speculative, lottery ticket type investment. It’s called emotional investing. Apple Dropping Versus A Meme Stock Dropping When Apple sees downside, you might add on weakness. Same with Amazon or Tesla. Established companies with, presumably, more bright days ahead. Any weakness is temporary, particularly through the lens of an investor with a long-term time horizon. When, say, BBY drops 41% in one day – like it did last Friday – it’s an entirely different story. Doubling down in this situation requires a relative leap of faith and, pardon our phrasing, balls of steel. Or, at least, a few extra bucks you don’t mind losing to throw around. Maybe you should just get the hell out? You’re pretty sure Apple, Amazon, and Tesla will be around – and thriving – one, five, ten, fifteen, fifty years from now. They’re the future blue chips of the stock market. At least this is The Juice’s – and maybe your – educated guess. You don’t know if Bed Bath & Beyond will be around next week. By the time you read this, BBBY stock could have made another social media-fueled run or it could be on its way to trading as a penny stock. This doesn’t mean you shouldn’t go for these high-risk, potentially high-reward opportunities. It just means you shouldn’t stake your financial future on them. The Bottom Line: As with most risky behaviors – such as drinking or gambling – moderation is key. Keeping your vices in their proper place can make for an overall good life. You’re not depriving yourself, which can lead to crazy binges. At the same time, you’re not consuming yourself in risk and uncertainty. From an investing perspective, you could call meme stock investing risky behavior. Here again, moderation is key. Perfect world scenario – you’re debt free or close to it. You comfortably pay your bills each month. You have a retirement plan and you’re executing it. You have other long-term investments in blue chips and stocks soon to achieve blue chip status. You have a portfolio with stated purposes and the strategies necessary to meet these goals. Now would be a good time to find cash equivalent to, say, 5% or so of your portfolio and speculate with it. Depending on your situation, this number might be higher or lower. The point is that you’re not just going all willy nilly into the flavor of the day. You actually include these longshot moonshots as part of a comprehensive investment portfolio and personal financial plan designed to get you where you want to go while maintaining an air of excitement. [instory_ad_1] |
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