What Gifting Stocks Can Mean for Your Tax & Estate Plans
There are many scenarios in which it may make sense to give away assets (stocks, bonds, mutual funds, etc.). Perhaps you are considering gifting...
3 min read
Joseph Sachetta
:
Jun 23, 2022
If you’d been scrolling through investment posts on Reddit last January and ended up in the WallStreetBets subreddit, you might be a multi-millionaire today. Amateur investment analysts who participated in the online community realized that major investors were short-selling GameStop stock, essentially betting that the failing video game retailer’s stock would continue to lose value. So they started an investment trend of buying up public shares of GameStop stock, driving up its value and forcing the original investors to buy back the stock for far more than they paid for it.
A lot of people who saw the Reddit posts where this plot was hatched decided to buy in, and were rewarded with huge gains. One 23-year-old investor told Forbes that his original investment of $28,000 grew to $3.8 million in just a few weeks. Those new millionaires were both smart and lucky. Putting nearly $30,000 into an investment because you read about it on Reddit is obviously a huge financial risk. The publicity of the GameStop case has surely resulted in a lot of people losing money because they want to be part of the next big investment trend they saw online.
Acting quickly and taking a big risk on a new investment is your prerogative. But loop in your financial advisors first. Social media and online articles are no substitute for the customized services of a professional investment advisor.
Sachetta, LLC’s team of advisors helps clients align their investment decisions with their personal and financial goals. If you’re thinking about making a change to your portfolio because you heard about an interesting new trend, reach out to us first. A short conversation with a knowledgeable, independent investment advisor may help you avoid an expensive mistake—or give you the confidence to take the leap. Contact us today.
Joseph Sachetta, CFP®, CPA/PFS, MBA, MST
For over 40 years, Joe has worked in finance and accounting. He is a Certified Financial Planner, and a Certified Public Accountant. Joe’s passion lies with helping his clients strike a balance between living for today and saving for tomorrow.
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