Active management can take the guesswork out of faltering markets



TThere is so much unknown about the Omicron variant and what will its long term effects be on the economy – will it bring more downtime or will it go rather uneventfully, like the previous beta variant? Waiting and being unable to predict the outcome means investors don’t know where to jump, and as markets crash, active management can help take some of the guesswork out of investing.

As scientists predict weeks before we know definitively about the latest variant of COVID, such as the effectiveness of existing vaccines and the contagiousness of Omicron, investors are left in limbo to determine how to pivot their investments . If the closures start again, work-at-home inventories would benefit, but if the economy is able to continue to reopen, travel and leisure inventories would benefit.

There is a lot of uncertainty, and with Federal Reserve Chairman Jerome Powell’s recent remarks today on the potential foreshortening of bond cuts to fight inflation, markets have plunged, reports the Wall Street Journal. . How Omicron ends up affecting countries could impact the ability of the global economy to recover, but each new wave of variants in the United States has had less and less of an economic impact as companies adapt and that populations are vaccinated.

If Omicron ends up being a more dangerous strain, the economic downturn is inevitable, but if it continues to have only moderate effects, the recovery could continue. That’s a lot of unknowns and it means a lot of guesswork for investors. Active managers can offer advice and work to navigate uncertain markets as successfully as possible while relieving investor stress.

As investors flock to bonds while stocks fall, consider bond options from active management firm T. Rowe Price. The company offers a variety of funds depending on the type of exposure and the desired investment strategy. Options include the T. Rowe Price QM US Bond ETF (TAGG), the T. Rowe Price Ultra Short Term Bond ETF (TBUX), as good as T. Rowe Price Total Return ETF (TOTR).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



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