ATLANTA — The pandemic has provided time for us to ponder our financial future and a lot of people, primarily millennials, have turned to day trading.
It’s fast and risky and the kind of gamble many are willing to take during the financial uncertainty of the pandemic.
“Some are having success while others are not,” said financial expert Andrew Poulos. “You can make some money but you could very well lose your money very quickly.”
Day trading involves buying stocks and selling them within hours or even minutes.
Social media sites like Reddit and TikTok are even filled with posts focused on meme stocks. Those are the stocks that rise drastically in value due to hype on social media, not necessarily because of the performance of the company.
And, as Poulos explained, social media has also created a new generation of young investors
“Throwing your money into some stock that has hype on social media and hoping to come out ahead, those stocks can go up and come right back down in an instant and you’re caught in the middle of it,” he added.
The pandemic has caused layoffs and desperation, with some willing to risk a stimulus check or two.
“A lot of people are using that stimulus to try and make more money,” Poulos said adding, “that, in part, has been what’s fueling the market.”
We’re spending a lot of time at home, creating restlessness. Because of that some people look to day trading online for excitement.
However, Poulos said anyone who attempts day trading needs to be aware of the risks.
“I don’t know if I would be day trading because I’m bored at home,” he said. “We are playing with real money.”
Poulos concluded by also noting if your gains exceed your losses, Uncle Sam is going to demand his share.