Veteran investor Tom Lee is encouraging investors to remain bullish on the markets despite the recent correction in equities and other risk assets. In a recent interview on CNBC, the head of research at Fundstrat emphasized that the correction in equities, which saw the S&P 500 dip from above 6,000 to 5,832, presents an opportunity for investors to go long rather than adopt a cautious approach.
Lee expressed his optimism, stating, “This is another buying opportunity in our view. 2024 has proven to be a year where the market’s been strong and it has eluded many opportunities for sustained weakness. I know [December 18th’s] pullback was really painful, but to us, I think the fundamental supporting stocks are intact and I think it’s a good opportunity for investors here.”
He pointed out that the volatility index (VIX) surged sharply on December 18th, indicating a potential market bottom. Lee highlighted historical data, stating, “If you look at internals for the last ten days, [December 18th] looks capitulatory because not only did we have a 90% down day, but the VIX exploded by 75%.” He further explained that there have been only a few instances in history where the VIX rose significantly in a single day, with the market recovering its losses within a week in most cases.
As of Friday’s close, the S&P 500 was trading at 5,930 points, reflecting a recovery from the recent correction. Lee’s insights suggest that the market may be poised for a rebound, making it an opportune time for investors to consider long positions.
In conclusion, Tom Lee’s analysis provides a positive outlook for investors in the face of market volatility. By recognizing potential buying opportunities and historical trends, investors can navigate market fluctuations with confidence. Stay informed and proactive in your investment decisions to capitalize on market movements and maximize returns.