Following the GameStop Saga: What The Future Holds

Could something like the GameStop situation ever happen again?

This was the very same question I asked myself after the events of the GameStop/Reddit adventure in January. Such a drastic event could only be followed by drastic side affects – some of which still yet to come. Experts have already started to see past predictions on Wall Street since the incident come true. But, can anyone really be sure what will happen next?

Wall Street Bets, a subreddit on the app, was largely responsible for the event. (Dado Ruvic)

Last month, the market turned to utter chaos when a collection of Reddit users aimed to save their beloved video game corporation, GameStop. To learn more about how and why this happened, check out this article, here. Although the dominos set off after the height of the craze seem to have calmed down for a bit, one thing is clear: Don’t count on them coming to a complete stop any time soon.

I spoke with Daniel Treanor, the First Vice President and Investment Officer at Wells Fargo Advisors, to get his perspective on what the future has in store within the economic world. He shared not only predictions for what may still be to come, but some advice for young investors looking to get into stocks themselves.

After a high spike, GameStop shares have already dropped tremendously. (MarketWatch)

To start, is putting too many eggs in the stock market basket a good idea? “It’s always a gamble”, Treanor admitted. “If you’re trying to sell, there’s always somebody that has to be willing to buy your share.” For the Reddit users on Wall Street Bets, this was simply a speculative risk that just so

happened to pay off. “More or less, this was a product of a bunch of rogue investors trying to punish these big hedge funds… and mostly succeeding.”

In many ways, the stock market can be compared to an arcade game, where every investor gets a fair shot of bringing home the jackpot. “It’s more like a game of musical chairs“, Treanor countered. “Whoever is left standing always loses, and in this case, whoever was holding onto the stock once the market [went down] again was the loser.” In other words, what goes up must always come down… and while “stock market mania” as come to an end, in time, we will begin to notice some of its lasting influences on the country.

With the last stock market crash being fairly recent in the grand scheme of American history, one can’t help but wonder if a second wave of country-wide economic uncertainty looms. “I don’t believe so to that extent”, Treanor began. “You might have a generation be very cautious of investing, but to be a successful investor, they have to buy on the dips [of the stock market] and jump at opportunities instead of shying away.”

Pictured are the latest GameStop stock developments. Remember to stay updated! (Bloomberg)

If you have a grip on what you are doing and have the help of a trusted advisor, these risks will certainly pay off. Treanor urges beginning investors to remember that, “buying good value stocks…and investing with your head instead of your emotions” will make all the difference.

While it is nearly impossible to predict events similar to happened with GameStop, how investors choose to handle these situations will set them apart. “The secret to good investing is to focus on what we can control in tough situations”, Treanor finished. “You won’t have control over a lot of things – there’s a lot even I can’t control. But choosing to focus on variables that we can personally manage will help greatly in the long run.”

As the stock market ebbs and flows, it’s important to adapt alongside with it. Invest smartly, accept opportunities, and embrace whatever comes your way in the fast-moving world of finance!