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Washington2 minutes ago
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An environment of instability and insecurity in the world’s most organized stock market has increased.
- New technology destroys old perceptions, US market volatile from newbie investors
The convenience of investment through social media websites and smartphones has created a new problem for the financial sector in the US. An environment of instability and insecurity in the world’s most organized stock market has increased. To overcome this, US Treasury Secretary Janet L. Yellen took a meeting of officials of the Security and Exchange Commission, the Commodity Future Trading Commission, the Federal Reserve, and the Federal Reserve Bank of New York.
This was particularly discussed in the recent incident, in which novice retail investors raised shares of a small-sized company like Gamestock (also known as Meem Stock) by over 1700 per cent in social media. In the US, social media website users have been breaking into the stock market since last year.
These Robinhood Investors, without knowing the strong position of the companies, start buying the hoax through the mobile app only by believing the true false rumors raised on social media. Recently many stocks such as GameStop, AMC, Blackberry have seen leaps and bounds by leaps and bounds. Financial sector giants believe that due to availability of technology and social media, the market is growing cynical investors.
Taking this as a matter of concern, experts are telling the need to change the rules? US Treasury Secretary Janet L. Yellen said that we really need to ensure that the financial markets function properly, efficiently, and investors are protected. Certainly we are watching these events very carefully.
What are “Mim Stocks”?
Secondary stocks in the US stock market are being called meem stocks. These stocks are fundamentally weak, but hold fast on the strength of new-age retail investors.
Who are Robinhood investors?
Robinhood Investors are called new investors with no market knowledge. Actually Robinhood is a US brokerage firm which attracted many novice investors to invest in the stock market through its app.