US stocks closed lower on Wednesday as they failed to build on a two-day winning streak. The decline marks another episode in a turbulent year for stock markets. Aswath Damodaran, a professor of finance at New York University’s Stern School of Business, believes that volatility is due to two main reasons – what’s happening in the macro environment and the prevailing “mood and momentum” in the market. “My advice to investors is to recognize that the day-to-day moves you see in this market have little to do with fundamentals and a lot to do with sentiment and momentum because people are also out of whack,” Damodaran said. sometimes referred to as the “Dean of Valuation,” CNBC’s Street Signs Asia said Wednesday. “A lot has happened this year so people are trying to understand what’s coming and until they have a consensus on where we’re going, we’re going to get this volatility, these up and down days,” he added. Damodaran believes this is only a temporary phenomenon, with fundamentals eventually returning as the main driver for equities. “You have to be prepared for when it comes back,” he said. “Bargain” Stocks So how should investors trade today given the unpredictability of the stock market? “Your main concern as an investor is to buy companies that can withstand a hurricane, a disaster if it happens because the likelihood of it happening could be small,” Damodaran said. “But we could get into a really bad recession and risk capital not coming back into play for a year or two, maybe even three years.” Damodaran said he is steering away from companies with high operational and financial leverage and toward corporates with solid earnings and cash flows — even if they can’t deliver growth at this point. Read more The market is headed for “the best week of the year,” says one pro — and names 2 stocks to take advantage of. Should Investors Flee Stocks? Strategists offer their opinions – and reveal how to trade volatility Investment pro says ETFs are now a better bet than stocks – and reveals areas of “enormous” value Within big tech space, Damodaran said he owns stakes in Meta, Amazon , Alphabet, Apple and Microsoft. He also owns “winners who have fallen on hard times,” like Nvidia. Since their stock prices have fallen significantly this year, investors will get these stocks “at a bargain price,” he said. “These companies – they’re not going anywhere. These are not leveraged companies; they don’t have much debt. You will survive. You will make money. They will sell their products. So from that perspective, I’m more comfortable with these stocks than the traditional safe haven companies,” he said. For example, Damodaran said he’d rather put money into Apple than Coca-Cola given Apple’s greater “staying power.” “I could be an outlier in that regard. But I think big tech has a lot more staying power in terms of revenue and profits than people give it credit for,” he said.