CHARLOTTE, N.C. — What a wild week it's been on Wall Street, with the big news of Robinhood investors shaking things up with huge swings on GameStop stock, as well as a few others, drawing a lot of attention, criticism and praise for the free market.
One component, though, is the social media platform Reddit, which helped generate a lot of the conversation about stocks to buy. This led to the roller-coaster ride of Gamestop, fueled by individual investors on the Robinhood app. Robinhood is a commission-free brokerage aimed at letting the little guy have access to Wall Street.
Needless to say, Robinhood has drawn a lot of attention this week. Some good, some bad. Fortunes have been made this week as GameStop stock, worth just $20 two weeks ago, surpassed $400 at one point as the price swing wildly.
But who exactly is driving this? Message boards on Reddit are made up of small investors grouping together to move stocks. Who are they?
For context, WCNC Charlotte reached out to Scott Fligel, a wealth management advisor for Northwestern Mutual.
“There is a real danger in letting social media, people you’ve never met, whose qualifications and education you may not know, guide your financial future” Fligel said.
There is a difference in a long-term financial goal, like retirement, and pure stock speculation which can make you a quick buck. That’s the free market, but at least you know who is giving you your advice.
“What we tell our clients is to always have a plan that is tied to your goals, your risk tolerance, and from that standpoint, those are sound principles that have proven time and time again to help client reach their goals” Fligel said.
This week's stock speculation on Walla Street has been called a "casino-like atmosphere." It's drawn the attention of investors, hedge fund managers, regulars and politicians calling for more oversight from the Securities Exchange Commission.