Veteran investor Tom Lee is advising investors to remain bullish on markets despite the recent correction in equities and other risk assets. In a recent interview on CNBC, Lee, who is the head of research at Fundstrat, believes that the recent dip in the S&P 500 presents an opportunity for investors to go long rather than adopt a cautious approach.
Lee points out that the volatility index (VIX), which measures the stock market’s expectation of volatility based on S&P 500 index options, rose sharply on December 18th. He explains that historically, such a rapid rise in the VIX has often correlated with market bottoms.
According to Lee, the recent pullback on December 18th may have been a capitulatory move driven by panic selling in a momentum trade that was ending due to the year-end approaching. However, he highlights that the fundamental support for stocks remains intact, making it a good opportunity for investors to consider buying.
As of the latest close on Friday, the S&P 500 was trading at 5,930 points. Lee remains optimistic about the market’s potential for recovery, citing historical data that shows market rebounds following similar instances of heightened volatility.
In conclusion, despite the recent correction in equities, Tom Lee’s advice to investors is to view this as a buying opportunity rather than a reason to stay cautious. With the fundamentals supporting stocks still intact, Lee believes that the market has the potential for a strong recovery in the near future. Stay tuned for more updates on market trends and investment opportunities.