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GameStop and AMC stocks found another leg to run on Wednesday, recording their strongest trading day since short internet-fueled pressure sent their stock prices into the stratosphere last month.
AMC shares closed 18% higher at $ 9.09 and GameStop more than doubled to settle at $ 91.70 weeks after the so-called “stock meme” frenzy subsided. Retail investors received a basket of recommendations on the Reddit Wall Street Bets forum in hopes of exposing unusually high short interest from hedge funds on a number of stocks.
Although the rally was short-lived, CNBC’s Jim Cramer said on Wednesday that young traders profiting from commission-free trades on brokerage apps like Robinhood should rely less on speculative trades and return to investing basics. .
“If you really want to beat the big institutions at their own game, you don’t do it with GameStop and AMC. You do it with fractional actions and you do it right,” said the host of ‘Mad Money’. “The $ 500 Club … this is how you make real wealth.”
The comments come after major US averages also compiled their best trading day in weeks. The Dow Jones Industrial Average added 424 points to hit a new closing high of 31,961.86, up 1.35% from Tuesday. The S&P 500 and the Nasdaq Composite both closed around 1% higher.
As individual investors continue to draw inspiration from Reddit to jump into stocks like GameStop, Cramer warned of the dangers of group thinking in the market.
“At the end of the day, it’s not a team sport,” Cramer said. “Instead of chasing after these risky meme games, instead of impaling yourself on pressure that goes wrong, why not try investing for the long term?”
After the market closed, the Cramer name ditched 12 proven stocks that are trading above $ 500, a price that is generally out of reach for investors who lack a lot of capital to implement. Thanks to fractional shares, where part of a stock can be bought, high-value stocks like Amazon or Chipotle may not be too out of reach, he added.
“A part of [these stocks] are still off their peaks, even after today, “the host said.” I want you to pick three and start buying.
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