July 30, 2020
Many of you may recall day trading became popular in the late 1990s among young people and retirees. The technology stocks, frequently unprofitable, still had increasing stock prices – until the bubble burst. Most day traders lost money.
It was thought those days were over but surprise, it is back.
Smartphone apps such as Robinhood entice young people to day trade with very little knowledge of what they are doing and the consequences. In an extreme circumstance, a 20-year old man thought he was $700,000 in debt and committed suicide. It turns out, he may not have understood the statement. While this is an unfortunate example, it speaks to the dangers of day trading without knowledge.
There is a crop of new investors among the young people sheltering in place. Add to that, the lack of sports. According to Frank Taddeo’s article in Sports Illustrated (May 28, 2020), the pandemic has changed the betting dynamic. Normally, baseball, hockey and basketball would be active and wagers by professionals and recreational gamblers would be betting on the outcomes.
With no sports, evidence shows these sports betters moved to the stock market.
Brent Weiss, co-founder of Fact Wealth, a Baltimore financial planning firm said, “Digital literacy does not equate to financial literacy.”
Trades with no commission make rapid, daily trading enticing.
Get rich quick headlines attract people as well. Professional investors tend to look at risk/reward over the long-term not believing that get rich schemes work. We think a long-term view putting money in the market over time is the best long-term strategy.
Financial Connections makes its staff available to journalists to share knowledge.
READ MORENo Hidden Costs. No Referral Fees. No Commissions.
As a fiduciary, we put our clients' interests first. Our compensation comes exclusively from you. If we don't directly provide a particular service, we can serve as a resource for referrals to other professionals.
Download the fee schedule Download Disclosure Form ADV Parts 2 & 3You are leaving www.FinancialConnections.com and will be automatically redirected to the link you clicked.
Changed your mind? Go back to www.FinancialConnections.com
You are now leaving the "Financial Connections" Website and will be entering the Charles Schwab & Co., Inc. ("Schwab") Website.
Schwab is a registered broker-dealer, and is not affiliated with "Financial Connections Group, Inc." or any advisor(s) whose name(s) appears on this Website. "Financial Connections Group, Inc." is/are independently owned and operated. Schwab neither endorses nor recommends Financial Connections, unless you have been referred to us through the Schwab Advisor Network®. Regardless of any referral or recommendation, Schwab does not endorse or recommend the investment strategy of any advisor. Schwab has agreements with "Financial Connections Group, Inc." under which Schwab provides “Financial Connections Group, Inc.” with services related to your account. Schwab does not review the "Financial Connections Group, Inc." Website(s), and makes no representation regarding the content of the Website(s). The information contained in the "Financial Connections Group, Inc." Website should not be considered to be either a recommendation by Schwab or a solicitation of any offer to purchase or sell any securities.
Cookie | Duration | Description |
---|---|---|
cookielawinfo-checkbox-analytics | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics". |
cookielawinfo-checkbox-functional | 11 months | The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". |
cookielawinfo-checkbox-necessary | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary". |
cookielawinfo-checkbox-others | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other. |
cookielawinfo-checkbox-performance | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance". |
viewed_cookie_policy | 11 months | The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data. |