"And while it's mostly been selling, I still think that it's not the best idea to overreact either way, even if the smart money and the retail crowd seem divided. Despite the latest wave of volatility, which made for a rather rough Thursday of trade for the S&P 500, which ended the day down 1.7%, with the Nasdaq 100 finishing down just a hair over 2%, I still think that standing by the proven winners, especially those with still-reasonable multiples, makes the most sense."
"The way I see it, if you're comfortable with taking a huge double-digit percent hit to the chin by hanging onto a high-flying AI play that might be punished further, holding on with your sights set on the long term isn't being irrational, at least in my view. However, if your sleep has been disrupted by this past week of tech volatility, perhaps you're overexposed and your well-being might benefit from a bit of rotation, even if a sell-off never materializes in this fourth quarter."
Smart-money activity in the quarter showed extensive buying and selling of individual names, with selling predominating. Recent volatility caused meaningful one-day declines for the S&P 500 and Nasdaq 100, yet maintaining positions in established winners with reasonable valuations remains a prudent long-term approach. Taking profits to rotate into defensive areas can be sensible, particularly to offset tax losses before year-end, but rotating solely to avoid potential drawdowns can deliver mixed results. Vanguard ETFs bought by hedge funds provide diversified exposure and can be a strategic alternative to concentrated, high-flying AI positions for investors seeking balance.
Read at 24/7 Wall St.
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