SPRINGFIELD, MA (WGGB/WSHM) -- The GameStop stock market frenzy continues to captivate and confuse investors. Many have questions about what is happening and if this is a good time to invest or not.
Western Mass News spoke with a local economics professor, Dr. John Rodgers from AIC, about getting insight into what has unfolded in the stock market since Wednesday.
"You saw, on Wednesday, the market goes down significantly. Yesterday it came back up. Today the futures are down," he said.
He told us this all comes as new apps like Robinhood are paving the way for smaller investors to break into the market.
"I would say this particular phenomenon has been around for a while, but it’s coming into its own. It’s an opportunity for democratizing the market. People can go on the Robinhood platforms and trade stocks. They don’t need to go through a major brokerage firm," he explained. "They are also trying to make a statement, stick it to the Wall Street hedge funds, who are driving this stock down and short selling. But these people are driving it up, causing the Wall Street firms to lose money."
Because of the sudden stock battle, Thursday, the app took steps to stop the war.
"This thing turned into a frenzy, and as a result, people got scared and said we should suspend trading in the stocks temporarily," he said.
But that move by Robinhood opened another can of worms as investors claim the app rigged the market against its customers in favor of larger hedge funds.
"They brought all the small investors into the market, and then they stopped the trading," he explained. "So all these small investors are mad at them."
While trading is once again open on Friday, questions remain on what this app will do to markets long term.
"This is a bit of a fad. Somebody gets the idea that a stock is undervalued or overvalued and start piling on," he added. "It turns into a bubble, and when that bubble burst, people get hurt, they get mad, they file lawsuits. But I don’t think it will impact the broader market."
Western Mass News also asked Rogers if now is the time to invest or stay away from the market.
"There are a lot of imponderables out there, and that’s the nature of markets. If you have a long-term view, and you believe in the future of the U.S. and global economy, you’re going to do well being an investor. But you can’t expect to strike it rich quick," he noted.