This U.S.-Driven Stock Crash Is Not A Crisis, Seth Freeman Says
Retail and non-professional investors should not see the current U.S. market selloff as a crisis, said Seth Freeman.
The extent of the current slide in the U.S. equity markets will decide how long the ongoing global sell-off lasts. Yet, retail and non-professional investors, who may panic, should not view this as a crisis.
That’s the advice from Seth Freeman, senior managing director at EM Capital Management. He doesn’t see this as a lasting crisis as the U.S. and Europe fundamentals, despite Brexit concerns, look good, Freeman told BloombergQuint in an interaction.
Dow Jones Industrial Average plunged almost 1,600 points yesterday, extending the U.S. equity market sell-off. That triggered fears of a contagion. India’s benchmark Sensex opened more than 1,200 points lower today, the biggest decline since Nov. 9, 2016, the day after Prime Minister Narendra Modi announced demonetisation.
The sell-off may get worse if nervous investors start offloading their entire basket of funds in one shot, rather than selling individual stocks, Freeman said. That may lead to selling in broader and emerging markets while individual constituents will be fine, he said.
Negative impact on emerging markets like India, if any, will only be for sentimental reasons.Seth Freeman, Senior Managing Director, EM Capital Management
Freeman said it’s too soon to chart a trend on volatility and investors must track it for at least a week.