Private investors are selling off stocks, while advisors urge not to panic
Over three-quarters of the financial advisors surveyed by CNBC recommend reviewing portfolios against goals or sticking to the chosen strategy rather than reacting to the sell-off.
A CNBC flash survey of financial advisors showed that most of them do not suggest clients change their investment composition following a sharp market decline. The survey included 38 representatives from 121 invited companies.
The sell-off primarily affected technology stocks: the Nasdaq Composite lost 5.5%, while the S&P 500 index dropped by 4.4%. Analysts linked the decline to concerns about a slowdown in data center construction following significant Democratic victories in the elections. The Nasdaq ended the session more than 10% below its recent high, entering correction territory.
Advisors believe that investors should first check whether their portfolio aligns with their financial goals and acceptable risk level. Panic may indicate the need for such a review, but the sharp downturn itself should not become a reason for immediate decisions.
Andy Pratt, Director of Investment Strategy at Burney Wealth Management, noted that regular contributions to 401(k) plans allow purchasing assets at lower prices during market declines. According to him, a well-structured portfolio may not require changes during a downturn.
Dan Moisand, a financial advisor at Moisand Fitzgerald Tamayo, stated that for long-term investors, consistency is usually more important than trying to predict every market movement. Tra Sullivan, a financial planner and Director of Investments at Beaird Harris Wealth Management, described the historical growth of the U.S. market after midterm elections as merely context, not a guarantee of future performance.
