Active Management Can Take Guesswork Out of Wobbling Markets

There is so much that is unknown about the Omicron variant and what its long-term effects will be on the economy — will it bring more shutdowns or instead pass fairly uneventfully, like the previous Beta variant? Waiting and being unable to predict the outcome has investors unsure where to hop, and as markets take a downturn, active management can help take some of the guesswork out of investing.

With scientists predicting several weeks before more is definitively known about the newest COVID variant, such as the efficacy of existing vaccines and how contagious Omicron is, investors are left in a limbo of figuring out how to pivot their investments. If lockdowns commence again, work-from-home stocks would benefit, but if the economy is able to continue reopening, travel and leisure stocks would benefit.

It’s a lot of uncertainty, and with Federal Reserve Chairman Jerome Powell’s recent remarks today on potentially shortening bond tapering to combat inflation, markets have taken a dive, reports the Wall Street Journal. The way that Omicron ends up affecting countries could impact the ability of the global economy to recover, but each new wave of variants in the U.S. has been met with increasingly less economic impact as business adapt and populations get vaccinated.

If Omicron ends up being a more dangerous strain, economic pullback is inevitable, but if it continues to only have mild effects, recovery might continue. It’s a lot of unknowns and means a lot of guesswork for investors. Active managers can offer guidance and work to navigate uncertain markets as successfully as possible while taking the stress out for investors.

As investors crowd into bonds while equities fall, consider bond options from active management firm T. Rowe Price. The firm offers a variety of funds depending on what type of exposure and investment strategy is desired. Options include the T. Rowe Price QM U.S. Bond ETF (TAGG), the T. Rowe Price Ultra Short-Term Bond ETF (TBUX), as well as the T. Rowe Price Total Return ETF (TOTR).

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