Inflation, supply chain constraints, and the ongoing issues with China have the Wall Street experts divided at the moment, with many seeing the recent dip in the market as a buying opportunity while others recommending prolonged caution.
Katerina Simonetti’s remarks on CNBC’s “Worldwide Exchange”
On CNBC’s “Worldwide Exchange”, Morgan Stanley’s Katerina Simonetti, adding her two cents to the debate, said an up to 15% correction before the end of the year was “inevitable.
Going into the fourth quarter, we know that we can expect lower valuations and higher taxes, and this certainly is going to be a different kind of market for the remainder of the year.
The benchmark S&P 500 index is currently down a little under 5.0% from its year-to-date high in early September.
What Simonetti recommends investors should do
Simonetti doesn’t see “correction” as inherently bad for investors and recommends they “take profit in the indexes” and put their money in other sectors that are better positioned to weather the sell-off. She added:
We think a correction is healthy, and it doesn’t mean that we have to sell out our equity portfolios. There are always ways to make money even during the times of correction.
According to Simonetti, investors should focus on diversifying their portfolios in this market and avoid “over-concentration” in a single country or industry.
Her view is in contrast with Hightower’s Stephanie Link’s and Cerity Partners’ Jim Lebenthal, both of whom are still bullish on the market and see the recent dip as a “buying opportunity”.
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