Crowd trading is an extension of the concept behind crowd funding, which is the practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the Internet. In crowd trading, a large number of people are encouraged to take a small position in a single “investment” in order to have a large impact on the price. This is not investing. Warren Buffett is an investor.
I’m not your mother, but if you feel you must join the “Robinhood/Reddit” crowd, please, please, cash only. Do not, under any circumstances, open a margin account or borrow money. As long as you stick to cash only, you might win, you might lose and you might learn something. But you won’t dig a hole you can’t get out of. Speculate if you must, but don’t risk a life changing loss.
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA