Will this be the summer of meme stocks? If AMC Entertainment Holdings' (NYSE:AMC) explosive, retail-trader-driven rally of about 2,640% this year hasn't convinced you, there isn't much that will. Even penny stocks like Sundial Growers (NASDAQ:SNDL) are edging back into the spotlight with the help of the retail trader army.

It's preferable to avoid buying highly hyped, low-quality stocks altogether. But there's no rule that says a stock is a bad purchase simply because people have made memes about it or simply because retail traders appreciate it. Investors considering an impulsive meme-stock purchase would be well served to pump the brakes and spend a little time developing an investment thesis of their own, based on valuation and fundamentals.

Let's take a look at a few of the important principles that could help you make a smart plan for buying meme stocks.

More in category

Delta variant: Third Covid shot may be way around masking, says Dr. Peter Hotez
July 27, 2021CNBC
Delta variant: Third Covid shot may be way around masking, says Dr. Peter Hotez
‘You better be in the right headspace or really bad things are going to happen': Shannon Miller on Simone...
July 27, 2021CNBC
‘You better be in the right headspace or really bad things are going to happen': Shannon Miller on Simone...
Here’s one big reason Fed tapering may not send bond yields soaring this time
July 27, 2021MarketWatch
Here’s one big reason Fed tapering may not send bond yields soaring this time
Visa results boosted by strong spending in person, online and on travel
July 27, 2021MarketWatch
Visa results boosted by strong spending in person, online and on travel
Opinion: Cody Willard: China’s tech-stock crash is making me worried about the U.S. equity market
July 27, 2021MarketWatch
Opinion: Cody Willard: China’s tech-stock crash is making me worried about the U.S. equity market
Opinion: Apple’s blowout earnings didn’t help its stock, and here’s why
July 27, 2021MarketWatch
Opinion: Apple’s blowout earnings didn’t help its stock, and here’s why
U.S. wealth grew by $19 trillion during the pandemic — but mostly for the very rich
July 27, 2021MarketWatch
U.S. wealth grew by $19 trillion during the pandemic — but mostly for the very rich
Feds sell one-of-a-kind Wu-Tang Clan album forfeited by ‘Pharma Bro’ Martin Shkreli
July 27, 2021MarketWatch
Feds sell one-of-a-kind Wu-Tang Clan album forfeited by ‘Pharma Bro’ Martin Shkreli
Opinion: I’m a former chief investment officer, and this is why I don’t see a long-term future for value investing
July 27, 2021MarketWatch
Opinion: I’m a former chief investment officer, and this is why I don’t see a long-term future for value investing
Starbucks swings to quarterly profit, but sees inflation, wages pushing U.S. costs higher
July 27, 2021MarketWatch
Starbucks swings to quarterly profit, but sees inflation, wages pushing U.S. costs higher
Google’s wave of digital ad sales helps it crush revenue, earnings estimates
July 27, 2021MarketWatch
Google’s wave of digital ad sales helps it crush revenue, earnings estimates
Microsoft tops $60 billion in annual earnings for the first time to cap record-breaking year
July 27, 2021MarketWatch
Microsoft tops $60 billion in annual earnings for the first time to cap record-breaking year
Home Depot deploys Bluetooth to combat organized retail crime, by preventing stolen items from working
July 27, 2021MarketWatch
Home Depot deploys Bluetooth to combat organized retail crime, by preventing stolen items from working
Stunning setbacks in Tokyo for U.S. gymnastics standout Simone Biles and tennis star Naomi Osaka of Japan
July 27, 2021MarketWatch
Stunning setbacks in Tokyo for U.S. gymnastics standout Simone Biles and tennis star Naomi Osaka of Japan
Opinion: Here’s your to-do list before the stock market’s next dive
July 27, 2021MarketWatch
Opinion: Here’s your to-do list before the stock market’s next dive
Is US electric vehicle market slowdown an opportunity to buy?
July 27, 2021FOX Business
Is US electric vehicle market slowdown an opportunity to buy?
Cramer's lightning round: Astra Space is a good spec at the right price
July 27, 2021CNBC
Cramer's lightning round: Astra Space is a good spec at the right price
Opinion: Politicians love their power to goose the economy and stocks but it comes at a high price
July 26, 2021MarketWatch
Opinion: Politicians love their power to goose the economy and stocks but it comes at a high price
Big 5 tech stocks now account for 23% of the S&P 500
July 26, 2021MarketWatch
Big 5 tech stocks now account for 23% of the S&P 500
Opinion: Why stock-trading apps like Robinhood plus social media are a potent brew for investors
July 23, 2021MarketWatch
Opinion: Why stock-trading apps like Robinhood plus social media are a potent brew for investors
Apple crushes June quarter earnings records
July 27, 2021FOX Business
Apple crushes June quarter earnings records