Meme stocks emerged as a pandemic-induced distraction from standard investment techniques over the last year, with millennials participating avidly as retail investors, effectively pushing out short-selling institutional investors on many occasions.
However, the current market dip, triggered by mounting concerns over rising inflation, the Fed's decision on interest rate hikes, and geopolitical tensions, has caused meme stocks to suffer. Meme stocks are high-risk investments that rely heavily on investor sentiment rather than macroeconomic fundamentals. So, as investors de-risk their portfolios to hedge against a potentially severe market retreat, meme stocks are projected to slump in the near term.
