What GameStop Stock Taught Us About Risk

The Principle:

Does your stock market risk match the kind of risk you can handle? Are you making wise decisions when it comes to your investments?

Honest Takes:

Why does GameStop, a company who closed more than 1,700 stores in the last few years, have a stock price that climbed over the past few weeks? While this is probably an anomaly, how many other stocks are overvalued at a dangerous level?

Is this really another form of gambling or actual investing? Brian talks about clients who made some poor investment decisions that came back to haunt them. How can you avoid situations like this?

Do you know what kind of risk you’re actually taking? Have you consulted with an advisor to make sure your risk and risk tolerance match? What is your strategy to get out if you need to? We can’t predict the future, but it’s important to understand when it’s a good idea when to get out.

Instead of making a bad decision, you need to have a process and plan in place to help you know when to hold and when to make a move. Everybody wants guaranteed money, but the stock market always carries risk. Be sure that you can handle the risk you’re subjected to in your plan.

Listen to the entire episode or click on the timestamps below to skip ahead.

[0:12] – What’s been happening with GameStop?

[5:07] – How does this differ from a small company?

[5:33] – What risk levels are you actually comfortable with?

[8:39] – Do you have a process in place?

Today’s Truth:

“There’s a lot of stocks out there overvalued. I think what we do a little bit is try to tell people what the risk is that they’re actually taking.”

Brian Bowen


The Host:

Brian Bowen – Contact