The retail investing coup: Is this the future of investing?
If retail investors can stay the course and invest in the right way, they can achieve good outcomes
Add BT as a preferred sourceTHERE has been a revolution. I am not talking about the coup in Myanmar. I'm talking about the Reddit retail army that has revolted against Wall Street and taken down some of the big hot shot hedge funds that manage tens of billions of dollars.
GameStop (the flagship meme stock and a favourite short among hedge funds) went from US$19 to US$470 in a matter of days. It has also fallen just as rapidly to below US$100. As at Feb 4, the stock stood at US$53.50. In the process, these Main Street amateur investors were able to band together to inflict heavy losses on professional Wall Street hedge funds
This has spawned a whole new lexicon of investing terms like meme stocks and stonks. Free trading apps like Robinhood and online communities like Reddit's WallStreetBets have now entered common vernacular. And when the likes of Elon Musk or Chamath Palihapitiya - the new generation of revolutionary leaders - tweet about a new "stonk", millions literally follow and drive prices higher. Prices of certain stocks, such as GameStop, AMC, Tesla and even Bitcoin, have seen wild swings and added volatility to markets.
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