Channel3000.com
February 1, 2021 10:33 AM
Anna-Louise Jackson - Forbes Advisor
Posted:
Updated:
February 2, 2021 11:31 PM
Markets kicked off the new year by repeatedly testing fresh all-time highs through most of January, before a late-month slump saw the gains evaporate. After notching a handful of record closing highs, the S&P 500 ended January down 1.1%.
There were plenty of political headlines driving volatility—from the Senate run-off elections in Georgia, to the assault on the Capitol, to the inauguration of President Joe Biden. But perhaps the biggest story came from an unexpected source: Extreme speculation in certain corners of the stock market.
While speculative stock manias are nothing new, the disruptive power of day traders reached a fever pitch in January. The market frenzy in shares of video game retailer GameStop was genuinely shocking, with the stock up 1,700% on the month at one point. Fellow YOLO stock, AMC Entertainment Holdings, was up more than 800% on the month at one point. Both stocks only fell slightly from their highs by month’s end.