It’s been a wild year for meme stocks — those that have gained popularity (or notoriety) via the internet. If you’re not familiar with them, think of companies like GameStop (NYSE: GME) and AMC Entertainment (NYSE: AMC), both of which saw their stock prices soar earlier in the year.
These and other meme stocks may be a suitable investment for a lot of people, but they’re just not right for me. Here’s why.
1. They’re very volatile
In late January, GameStop rose to almost $350 a share. As of this writing, it’s trading for around $191. These rapid swings make me nervous.
Even though I tend to take a buy and hold approach to investing — I buy stocks with the intension of keeping them for many years — I don’t want to load up on stocks that are likely to lose value over time. And based on the level of volatility meme stocks are subject to, I think that’s a very real risk.