1-28-25 DeepSeek Reaction: Why Diversification Works | Before the Bell

In the aftermath of the DeepSeek fracas, markets are still on a buy signal, breadth improved as markets came down to kiss the 20-DMA and then rallyed above the 50-DMA, still holding important technical support. Markets were over bought going into yesterday's trading, and the pullback was not unexpected. (This illustrates perfectly the reason for rebalancing risk in portfolios.) Nvidia shouldered most of the impact on Monday, dropping below its 100-DMA, but recovered to close above that level; the stock had a $600-B market cap reduction. The movement is proportional to its size; be careful making knee-jerk reactions to one day events. Apple did well on the expectation that cheaper AI models will help support the company. Apple has earnings announcements due this week, and there could emerge a decent entry point for this stock. Why we trimmed Nvidia and added Proctor & Gamble. Again, this is a prime example of how diversification can protect you from these one-day events.
Hosted by RIA Chief Investment Strategist, Lance Roberts, CIO
Produced by Brent Clanton, Executive Producer
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