Lizzy Gurdus, 24 June 2021
The Reddit-fueled trading frenzy is getting out of hand, according to the country’s top investment advisor.
Ric Edelman, the No. 1 registered investment advisor in the United States and founder of Edelman Financial Engines, said Monday that he’s “very concerned” about what he sees as a sweeping “pump-and-dump scheme” roiling markets.
“This party’s going to come to an end,” Edelman said Monday on CNBC’s “ETF Edge.” “There do need to be fundamentals. There need to be a sound basis economically for the pricing to be what it is.”
As “the democratization and the demonetization of Wall Street” progresses, buying stocks based on fundamental characteristics such as cash flow, management and return on investment is taking a backseat, Edelman said.
Instead, influencers such as Elon Musk and Mark Cuban are front and center, tweeting about investments that can skyrocket and lead retail investors to buy at the highs, he said.