New investors learn stocks go down, too

BMO Capital Markets chief strategist Brian Belski on investors who are worried about today’s markets.

A new wave of investors suffered big losses in recent days, getting a harsh lesson on how the stock market works.

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Technology stocks plunged over a three-day trading span that ended Tuesday by their widest margin in nearly six months, erasing thousands of dollars from some individual investors’ portfolios.

Some new investors used options to place big bets that tech stocks would continue to rise unimpeded and were wiped out. Others who had just got into those stocks over the past few months saw their recent gains eliminated. Meanwhile, investors who jumped into the market in March and played it safe saw mere haircuts to their portfolios.

A new wave of investors suffered big losses in recent days, getting a harsh lesson on how the stock market works. (AP Photo/Mary Altaffer, File)

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The painful stretch of trading has been a wake-up call for some of the stock market’s newest participants that stocks don’t just go up. They also go down, and sometimes, without any clear reason.

“The market has been an emotional roller coaster,” said Temitayo Ola, who is 31 years old and lives in Los Angeles. Mr. Ola got deep into trading stocks back in March.

“As someone new to the stock market, I didn’t realize it could hit periods where you have a pullback like this,” he said.

Wall Street analysts and money managers said the pullback seemed unprompted by anything other than that stocks had run up over a short period. Although the losses pushed the tech-heavy Nasdaq Composite on Tuesday into a

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