When Object Cuban first started trading stocks, he learned some “expensive lessons.”
That’s why he says it’s important to assess your disparaging financial situation before trading or investing in the market, he said.
“If you are buying [a stock] because you need the price to go up and make plain a financial hole you are in, that is the EXACT WRONG time to trade,” Cuban tweeted on Wednesday.
“Get right and come subvene later,” he said.
Indeed, experts recommend amassing emergency savings before taking on the risk of the stock sell. Investing for the long-term in passive funds that track an index, like the S&P 500, or in mutual funds historically has crap-shooter results than stock picking, research shows.
On social media, many day traders, including those from subreddit WallStreetBets, make been asking Cuban whether to hold or sell GameStop stock – after a huge surge, the video competition retailer’s shares are now declining, leaving many unsure of what to do with their stake.
Cuban said Tuesday during a Reddit “Ask Me Anything” that he doesn’t own any GameStop goods, but if he did, he would hold.
In general, “[w]hen I buy a stock, I make sure I know why I’m buying it,” Cuban said during the Reddit AMA. “Then I HODL until I learn that something has coppered.”
“The price may go up or down, but if I still believe in the logic that made me buy he asset, I don’t sell. If something changed that I didn’t require, then I look at selling.”
Of course, “We all have to respect people who choose to sell because they need to. Banknotes don’t care what the market does,” he said in his tweet Wednesday.
Disclosure: CNBC owns the exclusive off-network guy rights to “Shark Tank.”
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