USA TODAY International Edition
As GameStop, AMC stocks rock markets, is your 401( k) safe?
NEW YORK – The trading frenzy this week over high- flying stocks like GameStop, AMC and Tootsie Roll has sparked concerns that the stock market is headed for bubble resembling the dot- com boom and bust in 2000.
The swings have left some momand- pop investors shaken up. Now they’re worried about how to shield their nest egg if the supposed bubble expands and bursts.
Wall Street experts and money managers have some advice: Fear not.
“If you’re a long- term investor, you shouldn’t lose a lot of sleep at night over your 401( k),” says Dan Kern, chief investment officer of TFC Financial, an investment management and financial planning firm in Boston.
But buyer beware. While some small- time investors who have speculated on shares of GameStop and AMC may cash in hefty returns, it’s only a matter of time before the prices of these stocks collapse and a reckoning occurs for the investors who own them, he adds.
“Manias like this usually end in tears,” Kern said. “I’m reminded of some of the things I saw in 1999 where people told me they were making more money day trading than from their jobs. By 2001, very few of them were still day trading.”
What happened?
GameStop, AMC and several other companies have become targets for many online investors who have sent their share prices skyrocketing in recent days, taking on big hedge funds who have bet those same stocks would fall.