Wesley Nolte @Wesl3y: "𝗧𝗵𝗲 𝗦𝗸𝘆 𝗶𝘀 𝗙𝗮𝗹𝗹𝗶𝗻𝗴 The short..."

United Kingdom

𝗧𝗵𝗲 𝗦𝗸𝘆 𝗶𝘀 𝗙𝗮𝗹𝗹𝗶𝗻𝗴 The short version: Don't Panic. And the longer version: If you look at a heatmap of the S&P500 today (image attached), it's clear where most of the selling pressure is. Semiconductors are taking a clobbering, and because they're such a large part of major indices such as $NSDQ100 it looks as though the whole market is down. But it's not. Semis have had an incredible run. So good that any hiccup is bound to make investors nervous. It kicked off a few weeks back when $AVGO (Broadcom Inc) put out guidance that spooked everyone, and today it's flared up again. Asian chips got hammered overnight; there are nerves ahead of earnings from $MU (Micron Technology, Inc.) on Wednesday (the first big chip report of the season); and a more hawkish Fed has everyone on edge. Profit-taking is normal. Stocks go down as well as up, especially when they've gone up so much. And so quickly. And it's not just chips. $GOOG (Alphabet) has had an ugly run too, down double digits from its May highs. That's partly its own story, but it is related: an ~$85bn equity raise that spooked people on dilution; a couple of star AI researchers jumping ship to OpenAI and Anthropic; and the big question that’s hanging over the whole sector: is all this AI spending actually going to pay off? For a business growing Cloud at over 50% the sell-off feels more like nerves than a broken business. Is this the beginning of a market collapse? No one knows, but usually there are signals, e.g. * Some part of the economy is in trouble. You could argue inflation continues to be a problem, but the recent spike was largely due to energy prices, which are coming back down. There's no obvious large-scale economic issue * ALL risk assets sell off and safe havens pump. This isn't the case, at least not yet. Money isn't fleeing the market, it's rotating within it. The Dow is green today, and the likes of $MSFT (Microsoft) and $AMZN (Amazon.com Inc) are up while the chips bleed. That's rotation, not panic That being said, I've raised a bit more cash and will be following closely.  Stay invested. Stay diversified. Stay patient.

Not investment advice. The author may have financial interests in the mentioned instruments.