Be careful the next time you hear a stock tip and buy a speculative stock like GameStop because you don’t want to miss out on a sure thing.

It could cost you everything, especially if you gambled your entire life savings or worse, borrowed money.

To those people who lost money, paying a small management fee for quality advice must now seem like a bargain. Like everything else in life, there’s no free lunch.

That’s something, you’ll never hear from a discount broker.

I’ve seen it all before. There’s no way a small group of day traders can beat professional Wall Street traders. If you want to beat Wall Street, you need to have a long-term financial game plan.

During the whole GameStock trading fiasco in January, there were billboard signs splashed all over Montreal encouraging people to buy the stock by getting back at Wall Street. From the beginning of the year, the stock went from less than $15US to $347US on Jan. 27 before falling below $50US in February. 

If you were lucky enough to sell during a small window of only a few days at the share’s peak in January, you made money. Most people didn’t. Like lambs to a slaughter, these people got caught up in the herding mentality, while hearing that even kids were making money off GameStop.

Thinking not to miss out on a sure thing, they bought during the stock’s high thinking of better days ahead. Clearly now those days may never happen. Sellers snatched their money like hungry sharks in a feeding frenzy as they bought shares that suddenly tanked in value.

Will we ever hear how many people lost money? Probably not. Building up expectations and dumping stock to naïve investors was the true intention of these individuals giving stock tips all along. It’s not just unethical, it’s illegal and will ultimately hurt all investors.

You should always be leery about getting stock tips especially from billboard signs and online forums. You don’t know who’s giving them, and what they’re underlying motive really is. Stock tips are really like gambling at the Casino de Montreal. If you make money, it’s just pure luck.

If you want a good stock tip, listen to what some of the best and proven money managers in the business, like Warren Buffett, have to say. Buy only high-quality stocks that pay regular dividends and hold onto them for the long-term. 

The true road to wealth can be long and a slow journey full of potholes.

Rome wasn’t built in a day and you should treat your portfolio the same way. Be content with steady returns. My investment expertise will help you build long-term wealth through asset allocation of a well-balanced diversified portfolio.

A portfolio of quality stocks, bonds and cash equivalents will help to reduce market volatility and risk. That combined with solid investment and tax advice, will increase your odds of reaching your long-term investment and retirement goals.

That type of advice only comes from years of education and experience of developing investment strategies, choosing quality investments and avoiding investment scams. That’s something you can’t get simply doing a Google search or watching a few YouTube videos.

Stock tips are like horses that sound like a sure thing and you don’t want to miss out. The next time you hear one, talk to me for more realistic wealth creation strategies that I’ve developed over 20 years.

By jumping on a stock tip, it’s likely you’ll lose everything. Then you will really be missing out.

Michael Martella is a Senior Investment Advisor with 20 years experience at Assante Capital Management Ltd in Dorval, QC. His investment insights have been featured on Global News Montreal and on CJAD 800 radio and can be reached at (514) 497-7219 or mmartella@assante.com.

Resources

https://montreal.ctvnews.ca/can-a-gamestop-situation-happen-in-canada-experts-say-there-s-no-reason-why-not-1.5295116

https://montreal.ctvnews.ca/noticed-anti-wall-street-ads-in-montreal-they-were-bought-with-gamestop-cash-1.5296758?cache=xuafaggwnsf%3FautoPlay%3Dtrue

https://www.theatlantic.com/ideas/archive/2021/01/why-everybody-obsessed-gamestop/617857/

https://www.theglobeandmail.com/investing/markets/stocks/GME-N/