money Expert: Americans 'get distracted by a shiny new object' like GameStop instead of thinking about retirement
After the recent trading mania with GameStop, Bitcoin, and SPACs, one investment expert is cautioning against getting swept up in the viral frenzy and, instead staying the course with traditional retirement investment strategies.
“What concerns me the most is we get distracted by a shiny new object and short-term gains,” Michelle Seitz, chairman and CEO of Russell Investments, recently told Yahoo Finance Live. “But that won't take care of long-term financial security.”
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With the personal savings rate up, it’s tempting to forgo traditional retirement accounts and plunk money into splashier and speculative investments like Bitcoin or trading flash-in-the-pan stocks like GameStop for the potential of enormous returns. Trading apps like Robinhood have made it easier for everyday investors to do just that.
“I'm all for democratization of access to both debt as well as well as access to the markets,” Seitz said. “But the sensationalistic day-trading short squeeze mentality makes for a fun conversation. It doesn't make for secure financial resilience and long-term livelihoods.”
In the aftermath of GameStop and ongoing cryptocurrency peaks and valleys, Seitz called on policymakers to help regulate and said it was incumbent on financial institutions like Russell Investments, a firm with over $300 billion in assets under management, to educate the broader public.
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“It's an opportunity for us all to make sure that people understand what they're buying, what they're doing, and whether or not they're aiding their long term financial resilience, or they're destroying it,” she said.
One of the silver linings to last month’s GameStop meteoric rise and fall is now the conversation can turn toward the importance of responsible and easy investing. Seitz wants to bring awareness and assistance to the 40 million Americans like gig workers, contract workers, or self-employed individuals who don’t have access to a straightforward employer-sponsored retirement plan and ensure they have the same auto-enroll capabilities and multi-employer plans with balanced funds.
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“People have busy lives. This isn't their day job,” she said. “Making it as easy as possible to access savings and retirement plans — to make it an auto default that they can choose to get out of — but making sure that they have access [is] number one.”
Stephanie is a reporter for Yahoo Money and Cashay, a new personal finance website. Follow her on Twitter @SJAsymkos.
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