PEORIA, Ill. (WMBD) – Plenty of interest surrounds Wall Street as stocks for some companies remain unusually high, but local financial experts say there are factors people should consider before getting involved in the market.
The stock market and the apps associated with it are an unlikely talking point for most people, but they’re gaining major attention.
“I just downloaded the Robinhood app, looking more into it. I actually watched some video yesterday off of YouTube,” said Heath Drye, Peoria resident.
Interest in stocks peaked when shares for companies like GameStop and AMC skyrocketed this week.
GameStop reached a peak of $492.02 a share on Thursday. Meanwhile, AMC peaked at $20.61 a share.
Experts say when large investment corporations, or hedge funds, bet on the price of these stocks to fall. This method is called “short selling”.
“If so many people are selling, you know, there could be other people who see this is an opportunity to buy,” said Dr. Amit Sinha, Professor of Finance at Bradley University.
In the case of this week, those people are Reddit users who encouraged others to buy stock in these companies which allowed them to profit. Meanwhile, this hurt those that banked on the stocks dropping.
“I’ve never really seen anything like this in my 14-15 year career. It’s very unprecedented,” said Rockie Zeigler, Certified Financial Planner with RP Zeigler Investments.
Although it’s unprecedented, Zeigler says it’s not a bad thing that people want to get involved with the stock market.
“Due to technology, the last handful of years access to stocks and the stock market has dramatically increased and I think it’s a great thing,” Zeigler said.
He also says there are factors people should consider before putting their hard-earned money on the line.
“Be aware of what you’re getting involved in, understand as much as you can about how these things perform and what causes them to go up and down,” Zeigler said.
Zeigler says at this point it’s unknown if these trends in the stock market will continue.
The Robinhood app placed restrictions on which stocks individuals could purchase Thursday.