Finding Investment Opportunities during Market Volatility

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The S&P 500 showed its worst decline since March 2023, with the tech sector taking the biggest investment hit. Nvidia stock saw a 10% dive, wiping out around $212 billion in value. A correction in tech stock was inevitable. AI-related stock was on the up and up attaining record breaking results. This AI bucket is now full, and overflowing has started causing stock prices to fall.

This pull back in tech or tech sell off, which has been driving markets all year, might rattle some investors, but gives savvy investors the chance to top up their portfolios at lower prices. 

“Despite the short-term fluctuations, the long-term trajectory of AI remains unequivocally upward – and this is what investors are betting on as they bolster portfolios. Companies at the forefront of AI innovation are not merely reacting to market trends but actively shaping the future. Their value lies not only in their current market performance but in their potential to redefine entire sectors and create new avenues of growth.” – Nigel Green, deVere CEO.

With conflict and geopolitical tensions at work, AI plays a critical role in solutions for defence, cybersecurity, and conflict resolution. AI-related companies are sure to thrive in this globally volatile market and could help contribute to global stability.

Why would lower stock prices offer investment opportunities for investors?

Strategic positioning for the future – The AI-industry is proving that it is a vital part of current and future technology. AI is here for the long term as it is an essential component of modern life regardless of how markets perform. Investors can capitalise on the short term market sentiment by strategically positioning themselves for the future and long-term market performance.

Less means more – Buy good stock at lower prices – When markets, especiall AI-related stock prices take a bit of a dive, it is an opportunity for investors to buy more tech stock at lower prices than before. More units or stock means owning more shares of a company and potentially higher returns over the long term. 

Diversification to spread risk in market volatility

A key strategy to spread risk during volatility is to diversify your portfolio. The markets can be unpredictable at the best of times and mitigating the risk on your financial portfolio is essential. Diversification helps mitigate the risk of losses on your portfolio by spreading investments over different sectors, regions, and asset classes, like over tech, financials and energy sectors, USA, Asia and European regions, and equities/stocks, bonds, and cash asset classes. When one area performs poorly due to geopolitical events, another area might perform well.

Market volatility and price drops generally offer opportunities for savvy investors. Always consult with a financial advisor before making any investment decisions, as each investor has unique financial needs and goals.

Please note, the above is for education purposes only and does not constitute advice. You should always contact your advisor for a personal consultation.

* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.


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