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We recently discussed how investors, afraid of missing out, sent shares of GameStop Corp. (NYSE:GME) and BlackBerry Ltd (NYSE:BB, TSE:BB) into the stratosphere. Wall Street might have been taken by surprise, but the aftermath was entirely predictable.

For stocks to maintain their gains and climb even higher, there needs to be a reason. Unfortunately, there wasn’t with GameStop and BlackBerry. One week later, both stocks have cratered, and we can now see the financial aftermath and just how dangerous it is for inexperienced traders to invest and day trade.

What Happened with GameStop and BlackBerry Stocks?

A concerted effort by online day traders on message boards sent shares of heavily shorted stocks like BlackBerry and GameStop significantly higher. Over the course of just 10 trading periods, GameStop’s stock exploded from $20.42 to $483. That’s a short-term gain of 2315%.

BlackBerry followed a similar trajectory. Over a seven-day period, shares in the Waterloo, Ontario-based company advanced from $7.51 to $28.77. It was a gain of 283%.

After the euphoria wore off though, it was impossible to keep the momentum going. Just one week later, and GameStop shares have crashed more than 80% from previous highs. BlackBerry shares have crumped 60%.

The online hoards that rushed to take advantage of so-called easy gains are now left dealing with the financial bloodshed. Do you sell and deal with the massive losses or hold on and hope the stocks rebound?

The losses are pretty catastrophic.

What Can Investors Do to Mitigate Losses?

One 19-year-old investor from the Netherlands, who knew virtually nothing about GameStop, bought shares in the company back in December, before the big run up. He then added to his position in January.

Because he didn’t really know how to invest or what he was investing in, he held on during the stock’s nascent rise. Had he sold, he would have made somewhere near $50,000. Instead, as he watched GameStock tumble, he turned to online forums for reassurance. His advice was to hold onto the stock. He did, and he’s now $9,000 in the hole.

Others lost a lot more. One YouTube star bought shares of GameStop just as it was peaking. He didn’t sell either and has, so far, lost $85,000. In an interview he said he was angry “’cause I’m so bad at stocks.” And “it’s not my game…I only like doing it because I like gambling. My favorite thing to do is go to a casino.”

First off, these losses didn’t need to happen. And second, investing doesn’t need to be like gambling. Emotions can be powerful, especially when you’re watching a stock climb higher and higher. But doing homework on a stock, sector, or industry will give you a better picture on what you’re investing in, which can give you the confidence you need to find stocks that will make you money and avoid the ones that won’t.

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