The stock market has been the subject of much media scrutiny in recent weeks “for not a good reason” said Asso­ciate Pro­fessor of finance, Robert Atra. 

With ‘pump-and-dump’ stocks like Gamestop and AMC dom­i­nating head­lines via Reddit pages including the nine million member sub­reddit Wall­StreetBets, expe­ri­enced investors like Atra look to calm the storm with sound investing advice. 

“What people need to invest for is the long-term stocks,” Atra said. “Those kind of things like Gamestop probably have vir­tually zero impact on 401Ks in the long term and other types of goals you’re trying to achieve.”

Despite their recent pop­u­larity, Atra says that pump-and-dumps are a rel­a­tively common occur­rence in the stock market.

“This one was a little more high-profile, but every now and then some big news will happen about a company that a lot of times has to do with day-traders like on Wall­StreetBets,” Atra said. “Day-traders come and they figure out they can’t make any money and then they go, it’s hap­pened in the past.”

Senior Ryan Goff, who serves as the vice pres­ident of the Hillsdale College Investment Club thinks that people should look into options that are safer for their money that day-trading.

“If you’re going to par­tic­ipate in that, you have to be com­fortable losing 100% of that money,” Goff said. “I have no issue with people who are doing that, but if you want all of the typical reasons that people invest, to be able to spend more of it later, don’t do that.”

Buying stocks of any kind comes with a certain amount of risk, and Goff believes that with little or no knowledge about the market or the actual logistics of the company in which you’re investing, the amount of unnec­essary risk out­weighs the potential ben­efits. Instead, Goff says that well-researched smart invest­ments for the long-term are the way to go.

“If you believe that the market only goes up, like a lot of people talk about these days, just do an ETF of a broader index, like the S&P or the NASDAQ or the Dow Jones Indus­trial Average, those broader indexes are gen­erally appre­ci­ating in value,” Goff said.

The Pres­ident of the Hillsdale College Investment Club, senior Reed Lawe, agreed that long term invest­ments are the most beneficial.

“The number one thing is that Albert Ein­stein said that com­pound interest is the eighth wonder of the world. That’s super true, and that’s a reason why young people should invest early,” Lawe said. “When you put money in the market very early, then it has a longer period of time to grow, even your earnings are going to begin paying div­i­dends, and you’re really going to pick up steam, very quickly, espe­cially as you get later in life.”

Not only is investing early in life a great way to grow your money, but Lawe says that the stock market isn’t always the best place to go with excess funds.

“If you really want to go about, making money, you should not just con­sider investing in the stock market, but also con­sider, you know, paying down your credit card bill if you have, a balance running, or even being aggressive, your student loans some­times that’s more important than just fun­neling money into your bro­kerage account,” Lawe said.

If you are going to use your money for invest­ments into the stock market, Atra has the perfect place for you to put it.

“What I would rec­ommend is find a good mutual fund. Go to a company like Van­guard or a similar type of fund, not only do they allow you to invest in a diver­sified port­folio, but they have excellent edu­cation screens on their web­sites,” Atra said. “They even have people that will, for free, guide you as to what you need to do.”

Atra espe­cially sug­gests this for the new or inex­pe­ri­enced investor, not only for the edu­cation that the mutual funds offer, but for the ease of starting your investing process.

“If you just go to the mutual funds them­selves, they fre­quently have every­thing you need to get started, you can get started with a very small amount of money; $100, $500, whatever,” Atra said. “You can then set that up as an investing program, where you invest a certain amount of money per month.”

With plenty of dis­trac­tions for new investors, Lawe says that staying focussed on the long-term trades is the key to financial success.

“Some­thing that I think young people fail to under­stand is not trying to be a day trader. The number one most important virtue when it comes to investing, is just patience,” Lawe said. “So buying com­panies that have intrinsic value and holding them for a very very long time, that’s really the greatest way to see returns, not by trying to time the market.”