Why Investors Should Avoid Buying the Banking Sector Dip

Even though things appear to have settled after SVB's collapse, that doesn’t mean all is clear. Consider options like healthcare and consumer staples instead.

An electronic display with different-colored lines showing up and down trading.
(Image credit: Getty Images)

With the failures of Silicon Valley Bank and Signature Bank leading to massive deposit transfers from regional banks to mega-cap banks, the banking sector is under duress. Although this trend is now slowing, it has created a challenging dichotomy — big banks have too many deposits and not enough assets to put them into, while smaller banks are stretched for liquidity.

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Austin Graff, CFA
Founder and CIO, Opal Capital

Austin Graff is the Founder and Chief Investment Officer of Opal Capital. He is also currently the Portfolio Manager for TrueShares Low Volatility Equity Income Fund (DIVZ), a publicly traded U.S. Dividend ETF. He also serves as the Co-Chief Investment Officer at Titleist Asset Management.