Social media has changed many aspects of life, including the ways in which people invest. Specifically, a growing number of investors are hoping to get rich by purchasing “meme stocks” — those that get a lot of buzz online.
GameStop (NYSE: GME) is probably the best-known meme stock because a group of Reddit users executed a short squeeze that got attention even outside of financial circles. But it’s not the only one. In fact, there’s even an ETF that trades under the ticker symbol BUZZ that uses an algorithm to identify and invest in companies that are top subjects of online discussion.
While it may be tempting to try to capitalize on the meme-stock trend (especially if you’ve heard about people getting rich doing it), the reality is that buying shares of companies based on social media attention is an extremely high-risk proposition that’s unlikely to pay off in the long run.