Two top JPMorgan analysts are encouraging investors to buy the dip whenever the stock market tumbles, saying any Dow plunges are temporary. | Source: REUTERS / Lucas Jackson
Two top JPMorgan analysts are encouraging investors to keep calm during any forthcoming stock market downturns and to buy when the Dow Jones tumbles. Why? Because they say the dips are temporary and the stock market will eventually recover any of its lost gains.
JPMorgan: Stock market will regain previous highs
JPMorgan quant guru Marko Kolanovic and chief U.S. equity strategist, Dubravko Lakos-Bujas, urge investors to BTFD (Buy The F***en Dip) and not squander a great opportunity.
Kolanovic and Lakos-Bujas made the assertions in an Aug. 8 investor note, as reported by CNBC.
“We do think that after a short period of stabilization, markets will likely regain previous highs. And hence, we see this sell-off as a medium-term buying opportunity.”
As CCN reported, the U.S. stock market experienced several erratic swings this week amid the escalating U.S.-China trade war.
Since tumbling 890 points on Aug. 5 after China devalued the yuan to near-historic lows, the Dow has made an uneasy but steady recovery.
Kolanovic and Lakos-Bujas expect trade tensions between the United States and China to continue. However, they don’t expect “further uncontrolled escalation.” Why? Because they believe that President Donald Trump doesn’t want a trade war-induced recession, which could hurt his chances of re-election.
Moreover, the JPMorgan duo believes that the stock market will go higher because of these contributing factors:
- Wage growth
- Better-than-expected corporate earnings
- Quantitative easing from global central banks
While Kolanovic and Lakos-Bujas say the current macro environment is “far from perfect,