Just when you think it is safe to go back in the water, the sharks return. The trigger for the current chaos was the Federal Reserve policy statement and freshman chairperson, Janet Yellen spooking investors with her 6 months later statement about when interest rates would go up.
Since then it has been a risk off moment to say the least. While the overall market is only down slightly there are entire swaths of the market that have not fared so well.
Take biotechnology. The former darling of the momentum crowd has been absolutely crushed in the last half of March. Call it profit taking or portfolio window dressing or tax related selling. Whatever the reason, the selling has been absolutely brutal.
Will it continue in April?
Anything is possible that’s for sure, but honestly I think the market is rather oversold, especially in some of these momentum categories that have been hit extraordinarily hard.
Ultimately it comes down to valuation and there things look much better than the fearful state we currently reside. The end of the quarter brings us to earnings season and the numbers should be supportive of a quick reversal. That said as the numbers roll in there are certain stocks that simply should not be owned no matter what direction the market is moving in.
If not already sold, here are 3 toxic stocks to dump now in the risk off world we now live in.