Asset manager says buy the dip: There are opportunities 'literally right now'

Published Fri, May 6 20225:29 AM EDTUpdated Fri, May 6 20227:00 AM EDT

After Wall Street's worst sell-off of the year, asset manager Michael Yoshikami urges investors to stay calm — and exploit it — revealing the stocks to consider buying right now. There was panic on Wall Street on Thursday as the Dow Jones Industrial Average plunged more than 1,000 points, or 3.1%, for its worst day since June 2020. Other major indices weren't spared either, with the broad-based S & P 500 and the tech-heavy Nasdaq Composite down 3.6% and 5.1% respectively. The speed and scale of the losses marked a sharp reversal from Wednesday's short-lived rally, when investors cheered the Federal Reserve's decision to rule out a 75-basis-point increase. Still, Yoshikami, CEO of Destination Wealth Management, believes investors should not be rushing to the exit just yet. "I think people really should not panic about what's happening right now. The market was down 1,000 points but it was up about 1 000 points the previous day. Valuations are more in line. The market digested a half percent increase in interest rates, which was unthinkable three or four months ago," Yoshikami told CNBC on Friday. Read more Here's what investors are saying and doing about the market's drop Wall Street likes these defensive stocks, especially during a sell-off He said the sell-off had created opportunities in tech stocks in particular. "I think if you have got money and you want to be in tech but you're not in tech; or you're in tech and you want to add to your positions to average your bases, I think there's an opportunity right now," he said. Stocks to consider could include FAANG stocks such as Netflix , Amazon and Apple , which have sold off "massively," Yoshikami added. "You've got opportunities here to enter into some of these names if you really believe in their franchises." He also said to look at big component stocks on the Nasdaq that have strong earnings power. "I think that is an opportunity literally right now." Portfolio adjustments Beyond tech — and with markets expected to see continued volatility in the coming months — Yoshikami advised investors to get into staples, defensive stocks, and dividend names as they position their portfolio for the next step up in markets. "That's going to happen. The economy in the United States is doing quite well even if interest rates are rising," he added. In positioning for this eventual recovery, Yoshikami said investors should be looking to "take some bait off the table." "You cannot ignore the opportunities that short-term markets present you to make adjustments to your portfolio strategy," he said. "I think there really is some benefit in being tactical, to look at some of the positions that are down and some of the positions you want to own that are down more than the position you're going to sell ... So that [in the end] you have upgraded your portfolio on a discounted basis."

Jeenah Moon | Reuters

After Wall Street's worst sell-off of the year, asset manager Michael Yoshikami urges investors to stay calm — and exploit it — revealing the stocks to consider buying right now.