Table of Сontents
- What Does ‘Diamond Hands’ Mean?
- Where Did ‘Diamond Hands’ Come From?
- Bottom Line
Diamond hands is slang for an investor who keeps onto an investment despite it losing value, such as a stock or cryptocurrency.
via Getty Images, Boonyakiat Chaloemchavalid/iStock
The expression “diamond hands” initially became popular in online investment communities to indicate an investor’s obstinacy or tenacity.
What Does ‘Diamond Hands’ Mean?
Although it is occasionally also used to refer to an investor who holds if their investment grows greatly in value, a diamond hands investor is often described as someone who doesn’t panic sell if their investment declines in value.
When someone patiently stays onto an investment and waits for it to appreciate or when someone keeps holding an investment that has greatly improved in value, it can be used as a praise. Additionally, it can be used disparagingly to describe a shareholder who obstinately hangs onto a stock that has lost value and is not expected to appreciate in value in the future.
Referring to someone as having “diamond hands” implies that they are holding onto an investment or security, as investors are known to do.
Diamond Hands vs. Paper Hands
Investors with diamond hands and paper hands are at odds with one another. When it comes to hanging onto shares or other investments, someone is said to have “diamond hands.” Investors that take the maxim “buy and hold” to the farthest are known as diamond hands. These investors may outperform the market if their investment grows in value in the long run, but they run the risk of losing a sizeable portion of their investment if it doesn’t recover.
Investors with “paper hands” are those who are concerned about portfolio losses and will sell a stock even though its price has hardly decreased. Paper hands may escape losses, but since they are constantly entering and closing new positions, they miss out on chances when equities recover and incur additional transaction costs. Their
Where Did ‘Diamond Hands’ Come From?
It is thought that the term “diamond hands” was first used on Reddit on the r/WallStreetBets forum. It is generally used to refer to those who invest in extremely volatile securities, such as meme stocks and cryptocurrencies.
Advice: The subreddit is credited for popularising a number of slang expressions and stock memes, such as “stonks” for stocks, “to the moon” for their targeted profit margin, and “tendies” for investing profits, which they represent with drumstick emojis. Members of this subreddit frequently invest in equities with significant risk.
Even while the phrase “diamond hands” first appeared in usage in 2018, it wasn’t until 2021—when the forum contributed to the rise in GameStop stock—that it became widely known. The phrase was then made more well-known by cryptocurrency dealers who also deal in
Bottom Line
A fantastic way to describe an investor who doesn’t allow market fluctuations impact them is “diamond hands,” but is it a compliment? It varies. Many investors find that buying and holding is a solid strategy, but nobody wants to be a “bag holder” (a slang term for someone who takes a heavy loss on a stock).
