Aftermath of the GameStop Craze

The Principle:

What dangers did the GameStop situation potentially cause? What should you really keep in mind when it comes to risky investments in the market? 

Honest Takes:

Remember GameStop a few months ago? The government is still investigating the situation that allowed some to win big but many others lost big. Suze Orman says the most dangerous thing is when people get into the stock market and only make money, thinking it’s easy. What does Brian think a typical retirement saver should look at market risk?  

Sometimes the stories and life experience of yourself or others can help you learn lessons. But with GameStop, a lot of younger people may think they can walk away with fantastic returns. When it comes to market risk, it’s important to analyze the kind of risk you can take. Think about it in terms of dollars. For instance, are you comfortable with losing $100,000? Remember that not every year will be the same with your returns. One year you might get great returns, but that’s not guaranteed for the following 10-20 years. 

What is your risk assessment? The level of risk you’re comfortable with will change amongst different people and different ages. You don’t have to have the same risk tolerance of everyone else. It’s worth measuring your risk you’re taking so you don’t get shock and surprised when something happens in your portfolio. 

Does your financial plan align with your risk tolerance? Make sure to have a conversation with an advisor to see that your investments are in line with the level of risk you are comfortable with and what your needs are in retirement. 

Listen to the entire episode or use the timestamps below to skip ahead. 

[0:13] – What is some of the aftermath of GameStop? 

[3:44] – The investing lessons come with time. 

[5:02] – Do you need to take that risk? 

[5:30] – What’s your risk assessment? 

Today’s Truth:

“I think you’ve got to really evaluate and say, ‘Do you really need to take that risk?'”

Brian Bowen

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The Host:

Brian Bowen – Contact