Bad Markets Improve Buying Opportunities

I think most investors naturally run for cover during big market downturns. 

 

The “coronavirus downturn” is actually delivering some significant buying opportunities.  In fact, the sell-off has reduced the prices of some of our premier domestic companies by 20, 30 and 40%. Price reductions like this are widespread within the S&P 500. 

 

During the sell-offs, mutual fund managers are enjoying something similar to a pre-Christmas buying spree. The recent downdrafts have also driven down the prices of some of the most highly ranked funds in specific categories ranked by Morningstar, creating more favorable current pricing in mutual fund and ETF formats. 

 

The reduced prices of renewable energy companies also have the potential of transforming the utility index of supplementing the strong dividend characteristic with an opportunity for performance through growth as well.

 

Although there are several opinions being expressed on the likely end dates of the correction, I think recognizing the sell-offs’ value could help investors reposition portfolios to recoup their recent losses.  Some portfolio rebalancing may also be needed. More to come.

 

This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.