Should Baby Boomers Add Tesla to Their Portfolios or Avoid the Risk?

Tesla (NASDAQ:TSLA) is in free-fall right now, tanking more than 5% on Monday, adding to a rout that’s seen Elon Musk’s EV titan shed close to 33% of its value in the past month alone. It just took three months for more than half of the stock’s value to be wiped out. And as the sell-off accelerates on the back of a growing list of worries (political and economic risks are among the scariest), perhaps TSLA stock at below $200 per share could be a possibility — so much for being a member of the Magnificent Seven.

For most Baby Boomers, the falling knife of a stock is probably too scary to catch on the way down. Even for younger investors, I’d not look to initiate a position that is too large at any one time, especially if retaliatory tariffs end up hitting the EV firm where it hurts the most.

Ample risks weigh as TSLA shares crash

Indeed, it wasn’t too long ago that former Canadian politician Chrystia Freeland floated the idea of a whopping 100% tariff on Teslas. Given Musk’s closeness to Trump, I recently noted that Canada may not be the only nation looking to target levies on the EV maker. It’s a serious risk, the magnitude of which is unknown. At the same time, if both sides take tariffs off the table, such a risk could be gone overnight.

As the analyst downgrades start coming in (price targets or recommendations could both be vulnerable), there may be enough fuel for TSLA shares to fall to last year’s depths. Unless you’re a fan of the brand, have a strong stomach, have faith the economy will hold up, and believe in Musk’s ability to bounce back, I’d take a raincheck on the name, especially if you’re nearing retirement. It’s one of the most volatile Magnificent Seven stocks since Trump took office and could continue to be for the remainder of the year.

In any case, one Gen Xer in 50-year-old Congresswoman Marjorie Taylor Greene recently disclosed her purchase of a few stocks, which included Tesla. Though the thought of getting TSLA shares at a more than 50% discount alongside the likes of Congresswoman Greene may be tempting, I certainly wouldn’t rush into the name, given the stock remains up over the past year. Indeed, the faster stocks rise, the faster and harder they can fall once the market falls.

Has Tesla’s brand taken a bit of a hit?

Of course, economic and political headwinds come and go, but brand power lasts forever, right? I’m not so sure in the case of Tesla, with the growing number of Tesla haters that have rallied at various dealerships across America. Indeed, Musk’s move into politics was a risky move that appeared to have paid off when TSLA stock shot up to new highs back in December.

Nowadays, the trade has gone south, and it looks like politics has introduced a haze of uncertainty and risk to EV makers’ shares. For shareholders, it’s a tough spot to be in. Though Tesla may have lost many aspiring and loyal customers in these past few months, only time will tell how robust the brand really is.

Personally, I’d much rather be in one of Tesla’s EV rivals at this juncture. Bulls, like Webush Securities’ Dan Ives, still believe in the name on the way down, recently touting TSLA stock rout as an opportunity to buy in a recent sit down with CNBC. In any case, I’m inclined to avoid the risk and newfound negative momentum than try to be a hero by attempting to catch shares on the descent.

The post Should Baby Boomers Add Tesla to Their Portfolios or Avoid the Risk? appeared first on 24/7 Wall St..