Steven Wagner Discusses Market Volatility with The Wall Street Journal
Market volatility returned with U.S. stocks lurching lower for the majority of Thanksgiving week. For example on Monday, November 19, all three major indexes ended the day down, with the Dow Jones Industrial Average and S&P 500 down 1.6%, and 1.7% respectively. The tech-heavy Nasdaq Composite lost 3%.
A broad retreat from risk across financial markets occurred, most notably within the technology sector. Google parent Alphabet Inc. closed in bear market territory, and Apple slid 4%, ending just shy of bear market territory. For Apple, this represents a drop of at least 20% from a recent high. Netflix, Facebook and Amazon were also all down more than 5% on Monday. In the crypto markets, Bitcoin prices crashed below $5,000 for the first time this year.
Amidst Monday’s slide, The Wall Street Journal reports that investors are beginning to question the momentum that has led stocks to record highs. Bleak forecasts among former market-leaders combined with rising interest rates and a stronger dollar taking a toll on profits are all factors causing investors to expect a large slowdown in corporate earnings.
To help understand this recent market volatility, and learn some effective ways to safeguard investments, The Wall Street Journal spoke with Omnia Family Wealth Co-Founder and Chief Executive Officer Steven Wagner.
In the article, Wagner describes how Omnia Family Wealth decided early on this year that they would limit their exposure to risky investments by trimming some of their holdings of high-growth companies that had performed well over the past few years.
“Look, you could have another 20% blowup rally, but we just don’t know. Nobody knows. So you have to ask yourself if you have to get every last nickel off the table,” explains Wagner. “We’re willing to be a little early on that and maybe give up a little bit of the last leg of the bull market.”
With marketed declines continuing to spread and many company earnings expecting to slow down, Wagner’s strategy to retreat from risk earlier rather than later is proving itself to be a judicious choice.