Trump Media & Technology Group (NASDAQ:DJT) is a lightning rod among publicly traded companies. Because of its volatility and risk, Trump Media stock could shoot for the moon or have a crash landing. Therefore, constant vigilance and appropriate position sizing are vitally important.
People have strong opinions about Trump Media & Technology Group, which is typically shortened to Trump Media. I encourage stock traders to set their political opinions aside with Trump Media. That’s easier said than done, but it’s not about blue states versus red states. It’s about putting more green in your portfolio.
Trump Media: Not All News Is Good News
There are plenty of set-it-and-forget-it investments out there, but Trump Media stock isn’t one of them. You have to be nimble and ready to change your investment thesis at any given moment.
For one thing, the political landscape is always shifting, and Donald Trump’s chances of winning the 2024 presidential election will change over the coming months. Trump’s legal battles are constantly in the headlines.
Here’s an example of the headline risk associated with Trump Media. Not long ago, InvestorPlace contributor William White reported that Trump Media auditor BF Borgers CPA “was hit with charges from the Securities and Exchange Commission.”
Moreover, the SEC alleged that BF Borgers CPA took part in “deliberate and systemic failures to comply with Public Company Accounting Oversight Board.” You might or might not feel that this development is important, but White observed that Trump Media stock dropped on the news.
Trump Media: Know Why You Own It
You may have heard the investment principle of “know what you own.” To that, I would add, “know why you own it.”
This is certainly true with a volatile asset like Trump Media stock. Any uncertainty could shake you out of the trade when the going gets rough.
Maybe you’re a meme-stock traders who just wants to flip a few Trump Media shares for a quick profit. If you’re a serious investor, though, conduct your full due diligence on Trump Media.
Trump Media lost money in 2023. Also, for the month of March, Barron’s reported a 21% year-over-year decline in active users of Trump Media’s Truth Social platform.
However, the story isn’t fully written yet. Truth Social appeals to consumers leaning conservative who prefer alternative media. If you firmly believe that Truth Social can gain many followers over the long run, it could make sense to invest in Trump Media.
Naturally, the outcome of the presidential election will have an impact on Trump Media stock. So will various news items in the coming months, some of which may work in Trump Media’s favor.
The important thing is to keep tabs on what’s happening with Truth Social, Trump Media and Trump himself.
Keys to Success
You can’t control the news. However, you hold the keys to your success as an investor. First and foremost, understand the risks involved as volatility is to be expected. If you have a share position in Trump Media & Technology Group, keep it small.
In addition, monitor the headlines and have an exit plan if something unfavorable happens. Finally, only get involved with this opportunity if you firmly believe in the growth of Truth Social.
If you follow these guidelines, you just might succeed as an investor of Trump Media stock.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
