GameStop and AMC shares found another leg to run on Wednesday, posting their strongest trading day since an Internet-driven squeeze on stock sales pushed their stock prices into the stratosphere last month.
AMC’s shares closed 18% higher at $ 9.09, and GameStop more than doubled, closing at $ 91.70 weeks, after the so-called “meme stock” frenzy has cooled. Retail investors followed a basket of recommendations on the Reddit Wall Street Bets forum, hoping to expose an unusually high interest in hedge funds in a series of stocks.
While the recovery was short-lived, CNBC’s Jim Cramer advised on Wednesday that young traders who take advantage of commission-free transactions in brokerage apps like Robinhood should rely less on speculative trading and return to the basics of investment.
“If you really want to beat big institutions at your own game, don’t do it with GameStop and AMC. You do it with fractional shares and you do it right, “said the host of” Mad Money “. “The $ 500 Club … is how you earn real wealth.”
The comments came after major American averages also compiled their best trading day in weeks. The Dow Jones Industrial Average added 424 points to reach a new close high of 31,961.86, up 1.35% from Tuesday. The S&P 500 and Nasdaq Composite closed about 1% higher.
While individual investors continue to follow Reddit’s tips for flooding stocks like GameStop, Cramer warned against the dangers of group thinking in the market.
“At the end of the day, this is not a team sport,” said Cramer. “Instead of chasing these risky meme plays, instead of being impaled by a squeeze that went wrong, why not try to invest in the long run?”
After the market closed, the name Cramer lost 12 proven shares that are trading over $ 500, a price that is normally out of reach for investors who don’t have much capital to put to work. Thanks to fractional shares, where a part of a share can be bought, shares of high monetary value like Amazon or Chipotle may not be far out of reach, he added.
“Some [these stocks] are still up, even after today, “said the host.” I want you to choose three and start shopping. “