What the Reddit group wallstreetbets did with Gamestop in a short squeeze was something quite amazing. I joined in for a couple of days with the purchase of AMC stock that I quickly dumped after only making a couple of hundred dollars. The volatility of owning the stock and seeing the volatility of Gamestop and the attitudes of members of the Reddit group is just another reason why I hate self-directed brokerage accounts for 401(k) plans.
Gamestop is a $10 stock but was trading north of $400 before it crashed down back to double digits. It. Still is trading 9-10 times what it’s worth and it’s amazing how many of the Reddit group members were insistent they would hold on to the stock no matter what. While so many people. Made money with Gamestop, what about those who got in at $400?
What we don’t need is 401(k) participants with that fearless type of investing. The problem sometimes with fearless investing is the insistence on blaming others when the stock goes bad. Many Gamestop investors blame Robin Hood’s trade restrictions. The implosion of Gamestop’s stock, but again, it’s a dying business. What will stop a 401(k) day trader from blaming a plan fiduciary for allowing them to have a self-directed brokerage account? Nothing.