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First GameStop, now silver: Financial analyst gives advice amid unusual stock activity

Gamestop Silver
Posted at 12:56 PM, Feb 01, 2021
and last updated 2021-02-02 11:30:49-05

There is a lot of noise and attention on stocks and day trading with the recent rise in stocks like GameStop and AMC Theaters. Now, silver is taking center stage.

It's been led by some smaller day traders who are looking to make money off the big investors who essentially bet against failing stocks.

Financial experts say the bottom line is this is not investing. It’s more like gambling.

“This game of trying to play stock jockey of, you know, day trading and this, that and the other, you know, that's a fad, it sounds like fun, but the reality of it is, very few people consistently make money at it and it's very easy to lose money doing,” said Greg McBride, chief financial analyst at Bankrate.

McBride says the first bets and investments were made in companies that were already floundering. And sooner or later, their prices are going to drop, reflecting their true value. With silver and other precious metals, he says they've had streaky performances for decades.

“They’ll have periods of time where they do really, really well and hit the ball out of the park and then they'll have years where they do nothing,” said McBride. “And the mining stocks, precious metal mining stocks, are even more of a feast or famine.”

The bottom line is, winning in stocks is mostly a marathon, not a sprint. And it is all about variety.

“Rather than trying to pinpoint individual stocks, the average investor is better served buying a broad-based mutual fund or exchange traded fund that invests in the entire market and then just you know, contributing consistently and then just letting that ride. That's really the ticket over time. The market does reward investors who are disciplined and patient.”

This recent run on certain stocks has also gotten the attention of regulators and lawmakers who may end up putting some new rules in place.