(Bloomberg) Mohamed El-Erian, the chief economic adviser at Allianz, has warned investors against rushing to “buy the dip” in the stock market while Russian aggression in Ukraine continues.
El-Erian says the impacts of the Russia-Ukraine conflict will persist as it drags on, which will bring more uncertainty to the market and cause volatility in stocks.
He cautions that investors who traditionally buy the dip are now exposed to a less certain landscape. He says a broader comeback in stocks is not guaranteed unless the war ends, which still means the market could experience disruptions.
El-Erian says investors would be better off reshuffling their portfolios during periods of rebound and also being too particular about their purchases.
The economist recommends that investors select individual stocks and position them for a greater dispersion in the future in global economic performance.
The warnings by El-Erian came even as the Bank of America observed, in a Tuesday note, that retail traders were leading in the dip-buying. Vanda Research showed that retail investors accumulated around $7.1 billion worth of US stocks in the last five days as of Wednesday.
SPY is down -1.16% on premarket, CSI 300 is up 1.57%, DAX is down -3.56%.
