Shares in GameStop and AMC found a new point on Wednesday to place their strongest trading day, as a brief internet hit 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 a so-called “meme stock” frenzy cooled. Small investors have found behind the basket recommendations on the Reddit forum Wall Street Bets in the hope of exposing an extraordinarily high short-term interest rate through hedge funds in a number of stocks.
While the rally was short-lived, CNBC’s Jim Cramer on Wednesday advised young traders who leverage commission-free transactions on brokerage programs such as Robinhood to rely less on speculative trades and return to the basics of investing.
“If you want to defeat the big institutions on their own game, you don’t do it with GameStop and AMC. You do it with fractional shares and you do it right,” the Mad Money host said. “The $ 500 club … is how you earn real wealth.”
The remarks come after the major U.S. averages also set their best trading day in weeks. The Dow Jones Industrial Average added 424 points to hit a new high of 31,961.86, up 1.35% on Tuesday. The S&P 500 and Nasdaq Composite both closed about 1% higher.
While individual investors continue to use Reddit cues to flood into stocks like GameStop, Cramer has warned against 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 these risky meme plays, instead of getting caught up in a pressure that goes wrong, you can not try to invest long-term.”
After the market closed, the name of Cramer dropped 12 proven stocks trading more than $ 500, a price that is usually out of reach for investors who do not have enough capital to put to work. Thanks to fractional shares, where part of a stock can be bought, high-dollar stocks like Amazon or Chipotle may not be too far out of reach, he added.
“Party of [these stocks] is still from today, even after today, “said the host.” I want you to pick three and start buying. “