Bank Of America: Down For Good Reasons, But Will Make A Comeback
- Bank of America's stock has significantly underperformed the broader market so far in 2020.
- There are legitimate reasons for the poor stock performance - recession fears and a low interest rate environment - but I believe that the bank will make a comeback in 2020.
- I'm long Bank of America, and I have no plans to reduce my stake in the near future.
Bank of America's ($BAC) stock has taken a significant hit so far in 2020 due mainly to COVID-19 concerns (and the deteriorating interest rate environment). BAC shares have underperformed the broader market by almost 20 percentage points on a year-to-date basis.
Investors should definitely be concerned about lower rates and the potential economic impact of the recent health scare but, in my opinion, this pullback will eventually turn out to be a great long-term buying opportunity. To this point, I believe that shareholders of this large financial institution should use the current dip as an opportunity to add to their BAC positions.
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