'Buying the dip' could be a huge mistake, market expert says todayheadline

Amid recent market volatility, many investors have been rushing to ‘buy the dip.’ Michele Schneider, market strategist at MarketGauge, joined TheStreet to explain why this may not be the generational buying opportunity many think it is. 

Full Video Transcript Below:

MICHELE SCHNEIDER: Well, during this period of extreme economic uncertainty and more active trading approach is probably a lot smarter than what I’m hearing from a lot of analysts, which are saying generational, generational buy opportunity. We don’t really know that yet. This is record amount of volatility. For so long. We’ve had 4,000 point drops in the month of April alone, when there have only been seven in the entire history of the Dow. And so that’s kind of a situation where if you are day trading, you’re doing great. If you’re looking to invest. I’m not saying don’t, but what I am saying is that really know what your risk parameters are and your reward parameters. Because at this point, even though people are saying, for example, NVIDIA great buy, they would have been saying it’s a great buy at 180, at 140 at 100 at 90. And people are averaging down possibly could get hurt. We’re not into the falling knife. Wait for some level of stability.

What we do know is from a generational buy opportunity standpoint, it may not necessarily be in the areas that people think. For example, we are really looking at some commodities. We had been in gold for years. That was certainly one of those generational buy opportunities. And now with the silver gold ratio that peaked out at around 105, which was just historically a new high with that turnaround that we’re experiencing right now. It could be that silver is the next generational buy opportunity. Now, mind you, commodities are not stocks. You do have to trade them as such. But if you’re looking around the board at equity, you have to look at what is the emerging trend. And if it’s tech, I’m not saying it isn’t. But you also have to understand that is a victim, if you will, of these tariffs. And we don’t know what that’s going to do going forward. There are certain things that might get a pass. Things made in the USA, for example, might be more interesting to look at this current time.