--- title: This 'Incredibly Scary' Sector of the Stock Market Could Be a Big Winner for Investors description: After the recent banking crisis, you may be worried about investing in bank stocks. This market expert says it could be a great time to buy. authors: - name: Mallika Mitra role: Contributing Editor url: https://money.com/author/mallika-mitra/ bio: Mallika Mitra is a contributing editor for Money, based in Chicago. She has covered investing and retirement for seven years and her work has appeared in CNBC, Bloomberg, Kiplinger, AARP, Barron’s, Bankrate, The Daily Upside, ETF.com, The Bond Buyer, PLANADVISER, PLANSPONSOR and Investopedia. education: Craig Newmark Graduate School of Journalism at CUNY Kalamazoo College at_money_since: 2020 articles: 395 covers: - Investing - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology also_seen_in: - CNBC - Bloomberg - Kiplinger - Barron's - Bankrate - WGN-TV - CBS News Radio - This Morning With Gordon Deal - Everyone's Talkin' Money social: - https://twitter.com/mitra_mallika - https://www.linkedin.com/in/mallika-mitra-4577a386/ editors: - name: Brad Tuttle role: Senior Editor url: https://money.com/author/brad-tuttle/ bio: Brad Tuttle is a former senior editor at Money with over 10 years’ experience covering a vast number of personal finance topics, including careers, cars, travel, budgeting, investing, insurance, credit cards, consumer psychology, real estate, banking, and shopping and deals. education: Columbia University School of Journalism, MS at_money_since: 2014 articles: 366 covers: - Investing - Banking - Business - Career Advice - Credit - Credit Cards - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology social: - https://twitter.com/bradrtuttle - https://linkedin.com/in/brad-tuttle-834b225 former_staff: true published: '2023-03-30T17:45:49.000Z' modified: '2024-01-10T13:10:13.000Z' section: Investing tags: - News - stocks word_count: 493 canonical: https://money.com/why-buy-bank-stocks-now/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Illustration of a ascending arrow on top of a stack of coins](https://img.money.com/2023/03/Investing-Category-Stocks-Winner.jpg) For weeks, investors have been digesting the aftermath of a [banking crisis](https://money.com/bank-failures-explained-questions-answers/) that roiled global markets. But could this actually be a great opportunity to buy banks stocks, even though the idea probably seems frightening right now? There could certainly be reason to think bank stocks are a good buy at the moment, Aswath Damodaran, a professor at the Stern School of Business at New York University, said on a panel discussion featured this week at Public’s first-ever [Exchange conference](http://exchange.public.com/). ([Money](https://money.com/) was the exclusive media partner for Public's conference.) He says it all comes down to pricing. Investors often think that if they simply invest in "good" companies, they're going to see high returns — but investing is all about pricing, and sometimes investors forget that, Damodaran says. "If an excellent company is priced to be an excellent company, where's your upside?" he adds. "I'd rather buy a bad company that's priced to be an abysmal company." That's not to say that any bank [stocks](https://money.com/how-to-buy-stocks/) are necessarily "bad." But Damodaran says to "go where it's darkest," and right now, that may mean seeking out bank stocks. ## Why regional bank stocks could be winners As you've likely heard, earlier this month Silicon Valley Bank and Signature Bank [collapsed](https://money.com/svb-collapse-what-it-means/), marking the second- and third-largest bank failures in U.S. history. Fear quickly ran rampant as analysts, banking experts, investors and more tried to understand what the bank failures could mean for the banking industry overall, as well as the economy and the financial markets. Bank stocks, including those of smaller regional banks, suffered. Shares of Charles Schwab, for example, tanked immediately after regulators took over Silicon Valley Bank and are now down around 35% for the year, and shares of some regional banks [experienced](https://www.wsj.com/livecoverage/stock-market-news-today-03-10-2023/card/regional-banks-head-for-worst-week-in-decades-358OhjIyK40EOGtY1g7I) their worst week in years. While much of the fear has subsided, you may still (understandably) be worried about putting your hard-earned money into bank stocks. "I know it's going to be incredibly scary to go into a sector where everybody is running in the opposite direction," Damodaran says. But there could be an opportunity to find regional bank stocks now that are being "punished" for the fears running through the market, he adds. Of course, everyday investors typically shouldn't be focused on picking individual stocks. Financial advisors tend to recommend maintaining a [well-diversified portfolio](https://money.com/how-to-diversify-your-stock-portfolio/) — with assets of various sizes and across industries — that aligns with your risk tolerance, goals and time horizon. But if are looking for individual stocks (which, ideally, you're doing with just a small percentage of your portfolio), don't forget to consider the price in addition to the fundamentals. "At the right price, I'll buy any company," Damodaran says. 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