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Ask HN: Is the systemic risk on stock market getting too high?
2 points by jakub_g on Jan 30, 2021 | hide | past | favorite | 2 comments
Can the GME short squeeze have a negative ripple effect on the whole market as in 2008? Are there any other signs that market is getting out of control? (apart from various price ratios being at historical highs?)

Would you recommend someone who holds a portfolio of strong companies to withdraw from market soonish?



I would say that the risk is definitely increased, and companies that have valuations more based on growth might be on less stable standing. Maybe it makes sense to liquidate a certain portion of your stocks.

The thing is.... If others think this way too... Then they will start pulling away from growth stocks too... Which then will put downward pressure on the market, and push other prices down....

So, well the answer is nobody knows. If you want to play this like poker, sure, liquidate a portion that matches your risk preference and analysis of risk potential.


The very best answer is: Nobody knows.

If you are not emotionally or financially prepared for your portfolio to decline by half, you shouldn’t be in the market.




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