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The broad consensus is that inflation fears are driving investors out of tech stocks this week.
But CIO David Bahnsen says that overvalued tech stocks have flown too close to the sun.
He thinks that the sell-off is healthy, inevitable, and nowhere near over.
What began as a sell-off among tech stocks on Monday spilled over into the rest of the market on Tuesday, with the Nasdaq down 2% at the market s open and the Dow Jones Industrial Average following closely behind.
For now, though, the coast seems to be clear for stocks, according to Jordan Kahn, the chief investment officer at ACM Funds and comanager of the ACM Dynamic Opportunity Fund, which takes a long-short approach that s somewhat in the fashion of a hedge fund.
In addition to the gargantuan stimulus package that will be supportive of consumer spending, equity investors can rely on the fact that the global recovery is still in its early stages, interest rates remain low, and the Federal Reserve is committed to quantitative easing, Kahn told Insider on Wednesday.
He said he thought it would take several rate hikes from the Federal Reserve before stocks were hurt. As of now, it appears that the Fed will keep the federal funds rate near zero at least into 2022, if not longer.