Market sell-off might be your chance to invest long-term in discounted stocks

Updated: Sep. 8, 2020 at 4:29 PM CDT
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BATON ROUGE, La. (WAFB) - Red across the board… that’s how your portfolio may look right now, especially if you have a piece of a big name technology company.

“Tech stocks really have led the recovery since March,” said Chris Burns, a financial advisor at Burns Estate Planning & Wealth Advisors.

But now, those tech stocks lead the decline in the recent market sell-off.

“They’ve seen gains from March that don’t really back up their quarterly earning reports," Burns said.

A market sell-off is when clients or people suddenly take money out of the market. On any given day, markets can sway 1 or 2%, explains Burns, but when we see dramatic declines like we saw the first week of September, that’s what the pros call a market sell-off.

The local financial advisor says the sudden decline is partly due to tech stocks that were overvalued. He uses the recently split Tesla stock as an example.

“Their current market value cap is so out of line with what they do at a revenue standpoint, but Tesla is one of those stocks that people have that fear of missing out," Burns said.

That fear of missing out on the tech stock boom and dramatic drop is just one reason for the market sell-off. Burns also says another part of the blame goes toward the federal government.

“There hasn’t been anything done up in Congress or the Senate to get a stimulus package to the individuals inside the United States," he said.

Conversations about another relief bill linger on in Washington, D.C. This plays a role on the markets, says Burns.

However, the sell-off isn’t all bad news for buyers at home, especially if you’re a long way from retirement.

“When they see market sell-offs, they should treat it as an opportunity as long-term investing," Burns said.

For 20 to 30-year-old individuals, now is the time to go bargain hunting for discounted stocks and long-term investments. And if you’re in the home stretch of retirement, Burns suggests you take a look at your account and have a plan.

“And a plan is huge because it helps remove emotion from investing,” he said.

Big sell-off days can stir up emotions over your money, so find a financial advisor who can help decide how much risk you should take in the market.

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