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Welcome to Ask Clark, a column designed to answer your financial questions by money expert Clark Howard.
Anonymous says: “My husband invested a portion of his 401(k) in GameStop and AMC right before they crashed. What should I recommend he do with these stocks?”
Clark says: “These are highly speculative situations that were very unusual phenomena. There are people who rode these up and made big money. There were others who bought when there was a lot of media coverage on both of these companies.”
“If your husband does not believe that these are going to recover at this point, I guess you go ahead and just treat it as a loss and a lesson. And you bail out and you go into more diversified funds available in the retirement account,” Clark says.
As far as recommending which stocks to buy, here’s what Clark has to say:
“I’m not a big fan of buying individual stocks, especially not buying what are known as ‘story’ or ‘momentum’ stocks. And both of these [GameStop and AMC] were both of those things at the same time,” says Clark. “And they only ran up in value because of what happened on Reddit, and there was not the intrinsic value that the stock market reflected for a period of days or hours. And so they crashed back to Earth, and it’s just an expensive lesson learned for a lot of people.”
Read more about Clark’s advice on the GameStop saga.
To hear Clark’s full take on this question, listen to the segment:
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This post was last modified on March 11, 2021 4:26 pm
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