(WXMI) — Through the ebbs and flows of Wall Street, one thing that's continued to trend upwards is the number of young Americans putting their money into the stock market.
Even with all the uncertainty that comes with the pandemic, millions of more Americans are starting to trade.
Over the past few months, zero commission brokerage app Robinhood has exploded with millions of new users.
Traditional online brokers also saw a spike in new accounts last quarter.
“First you've got people just wanting to feel like they want to outsmart the situation they're in right now. We all feel so helpless we don't exactly know what to do so,” Personal Finance Expert Pete ‘The Planner’ Dunnsaid.
“Some people are saying okay well I'm going to take some risks and see if I can come out of this not even, but ahead,” Dunn said.
A new hobby? Or taking the place of an old one? With the popularity of sports betting also on the rise, Dunn believes many are now treating stocks the same way.
“Betting apps, sports apps are so much more popular now that this just feels like an extension of that and since there's no sports, what are you going to bet on?” Dunn explained.
“You're seeing a lot of users from those platforms find their way to the stock market, and it hasn't exactly been pretty for many of them,” he added.
Dunn says the interest in investing is certainly welcome but those new to it need to understand the basics and think of it as investing, not a get rich quick scheme.
“Unfortunately, with these trying times people should have an emergency fund and if you don't have an emergency fund yet you're gambling on stocks betting on stocks with day trading, that's a bad formula and generally doesn't end well,” Dunn said.
“The tough part is every once in a while, you'll hear a story about someone that's made a million bucks and it feels like it can be you but it's unlikely to be you,” he added.