With the markets down over 800 points on the Dow Jones Industrial average, continuing the downward trend, it’s clear the lack of news regarding stimulus hold, let alone reopening plans, are not playing too well. Burton Malkiel, professor emeritus of economics at Princeton University and author of “A Random Walk Down Wall Street,” and Dave Nadig, Chief Investment Officer and Director of Research at ETF Trends, break down the stock market’s turn lower with CNBC’s Bob Pisani on this week’s “ETF Edge.”
Professor Malkiel notes how the market is certainly reacting to the news but is also behaving somewhat randomly. The spike of Coronavirus cases has certainly factored in, but predictions regarding the degree of these spikes, along with the idea that some stimulus would be passed but in actuality hasn’t, has resulted in the market selling off. However, it is clear that there will be some point where these things will be under control.
With that in mind, Malkiel makes it clear that investors should not try to time the market, nor should they sell out now, given the market being down over 800 points. Instead, they should stay the course, as the best investors are ones that don’t try to time the market.
From Nadig’s perspective, regardless of what factor investors are engaged with, he agrees that the market is going down. The idea that this is a greater recognition that the K-shape recovery is going to become homogenous is now going out the window.
With that in mind, Nadig notes how there are great earning coming out this week. Industrials, in particular, have had a great three-month run but are now taking it hard today. It all comes down to what was already alluded to by Professor Malkiel regarding the country’s current standing.
“That leaves us on the back of what companies are actually able to do. It’s hard to get behind industrials, energy, and those sectors that have really been hurt today.”
Watch Professor Malkiel and Dave Nadig Discuss the Market Sell-Off:
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