Listen and subscribe to Opening Bid on Apple Podcasts, Spotify, or wherever you find your favorite podcasts.
Summer has proven itself to be a wild season for markets, with high highs, low lows, and serious talk of more volatility and woes.
But the recent market slide doesn’t mean investors should call it a day and pull all their money out of markets.
"Consider potential opportunities during periods of crisis or dislocation,” Kathryn Kaminski, chief research strategist of AlphaSimplex, told Yahoo Finance executive editor Brian Sozzi on his Opening Bid podcast (watch the video above or listen below).
The former visiting scientist at MIT’s Laboratory for Financial Engineering studied markets, trading, and emotions. She also has firsthand experience with financial crises and investor reactions; she began her investment career in 2008 in a world reeling from the Great Recession.
Rather than react rashly, “the key thing right now is to watch the data and see if this could be a real crisis that unfolds where we have a bigger recessionary move,” she added.
Kaminski said it's good practice to stick with key investing themes such as AI, with a longer-term perspective.
To be sure, calm guidance from Kaminski is being put to the test this month.
Markets saw a surprise mass sell-off on Aug. 5 as fears of slowing US growth and the unwind of the yen carry trade rocked sentiments.
The day saw the Dow Jones Industrial Average (^DJI) lose 2.6%, the S&P 500 (^GSPC) tank 3%, and the Nasdaq Composite (^IXIC) fall 3%.
All three major indexes are still trading below their mid-July record highs, according to Yahoo Finance data.
The same is true for popular names like Nvidia (NVDA), whose stock is off by 13% since mid-July.
In June, Kaminski said, she “started to get concerned” when markets “started to see some pretty severe cross-asset sell-offs." Remarking that commodities moved from long to short signals and bonds moved from short to long signals, “both of these are classic risk-off potential recession trades,” she said.
“Corrections often hint that a crisis could be impending,” Kaminski acknowledged, even though she is on the hunt for those aforementioned solid investable themes.
Ultimately knowing where to turn is anybody’s guess as September comes into view.
In an Aug. 12 client note, Mislav Matejka, head of global equity strategy for JPMorgan, warned of potential further weakness as summer continues.
The laundry list of worries includes weakening economic activity, a resumption of negative earnings revisions, elevated geopolitical uncertainty, and concentration risk.
Matejka calls out that the Fed “will start cutting, but this might be seen as reactive and behind the curve.”
“Lean on diversification,” Kaminski said.
Sounds about correct for this topsy-turvy environment.
Three times each week, Yahoo Finance Executive Editor Brian Sozzi fields insight-filled conversations and chats with the biggest names in business and markets on Opening Bid. You can find more episodes on our video hub or watch on your preferred streaming service.
Click here for in-depth analysis of the latest stock market news and events moving stock prices
Read the latest financial and business news from Yahoo Finance