Even if you don’t pay much attention to financial news, you’ve likely heard about the wild ride we had last week with GameStop stocks. Media as diverse as Twitter, CNBC, and SNL were buzzing about the dramatic spike in stock value that resulted from a single post on Reddit. In the span of hours, GameStop stock (which had been performing poorly for years) increased in value from less than $10 to over $325.

Why? The short answer: A group of people were trying to teach day traders and hedge funds a lesson.

The longer answer: A group on Reddit called r/WallStreetBets has been actively trying to thwart those who attempt to game the system through a practice called short selling. Short selling involves betting against a company by borrowing stocks and paying for them once their value has dropped (for a more in-depth explanation of short selling, click HERE). The members of r/WallStreetBets banded together to buy GameStop stock, which day traders and hedge funds have been short selling lately. The push to buy GameStop stock was so strong that the stock’s value skyrocketed.

What can we learn from the GameStop incident? Here are 3 practical lessons:

1. Day trading can easily backfire

There’s no clearer way to say this: day trading is a gamble. The market is an unreliable beast, and it’s tough to know which way it’s going to turn. If you decide to buy stock that’s performing well, you risk buying it at its peak. Similarly, if you sell stock that’s decreasing in value, you might end up selling it for less than your purchase price.

Timing the market is an incredibly risky thing to attempt. Though short selling may be tempting when you see a company on a downward slide, it’s still a risk. You’re borrowing against an uncertain future, and you might have to pay back far more than what you borrowed. On the flip side, if you flat-out buy $100 worth of stock, the most you can ever lose is $100 (and if you’re properly diversified, you won’t even have to worry much about losses).

2. Don’t put all your eggs in one basket

Betting on a single stock to soar or sink is dangerous. The market is unpredictable, and today’s Apple stock could be tomorrow’s Blockbuster. And even if a company seems to be performing well, it may be struck by a scandal at any moment (Enron, anyone?).

The lesson here is to not bet on a single horse. Instead, diversify your investments in a healthy mix of cash, stocks and bonds, ETFs, and mutual funds. Work with a financial advisor to figure out the right mix for you. By spreading out your investments, you set yourself up for all-but-certain success. It’s the same as planting several different types of seeds in the same soil, and seeing what grows and thrives.

3. Once you hear about a trend, that ship had sailed

For the most part, I caution against going all-in on market trends. Investors (and the public, in general) are fickle, and trends come and go. Over the past decade, we’ve seen various forms of cryptocurrency, gold, and tech stocks soar and crash. When you hear about one of these trending investment opportunities, it’s tempting to jump on the wagon and sink all your extra cash into this investment. However, unless you have some inside scoop or have been closely monitoring the market, you’re probably already too late to the game. In short, by the time you learn about a market trend, that trend is probably already reaching its peak.

That isn’t to say you can’t jump on some of the market’s trends. It can be fun and rewarding to make unlikely investments. However, I would give you this word of advice: Only invest what you’re willing to lose. If you take a $1,000 gamble on Bitcoin and you lose it all, will that put a major dent in your finances? Or is that money you could stand to lose? As always, consult your financial advisor before making any major (risky) investments.

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