High inflation, rising interest rates, and the possibility of a recession looming over the horizon has suppressed investor confidence this year and pushed stocks into a bear market. The S&P 500 is down nearly 17% year-to-date.
Adding to the bad news is that it’s very likely that the S&P 500 will hit a new low early next year. But the good news is that this could present a good opportunity for savvy investors.
“You’re going to make a new low sometime in the first quarter, and that will be a terrific buying opportunity,” Morgan Stanley CIO Mike Wilson told CNBC. “Because by the time we get to the end of next year, we’ll be looking at 2024, when the earnings will actually be accelerating again.”
Wilson forecasted a price call of 3,900 for the S&P 500 for the end of 2023, noting that U.S. stocks have a volatile road ahead as they move toward the end of the current bear market. In an interview with Bloomberg late last month, the Morgan Stanley stock picker said that investors can expect the bear market to end in Q1.
“I think we’re in the final stages. But the final stages can be very challenging, right?” Wilson added.
Though markets bottoming out may provide a buying opportunity, it may be a good idea to deploy the abilities of an active manager to guide investors through the wilderness. While passive strategies lack the flexibility to adapt to changing market environments, active ETFs can offer the potential to outperform benchmarks and indexes. Plus, active managers with greater resources and greater scope benefit from economies of scale, which can often translate to better returns.
As part of its lineup of active exchange traded funds, T. Rowe Price offers a suite of actively managed equity ETFs, including the T. Rowe Price Blue Chip Growth ETF (TCHP), the T. Rowe Price Dividend Growth ETF (TDVG), the T. Rowe Price Equity Income ETF (TEQI), the T. Rowe Price Growth Stock ETF (TGRW), and the T. Rowe Price US Equity Research ETF (TSPA).
Neil E. Kays, senior product marketing manager at T. Rowe Price, explained that if passive management is like “putting your car on autopilot,” then active management is giving the manager “the ability to grab the wheel.”
“In the current market environment, having an active manager that can pivot is key,” Kays added.
T. Rowe Price has been in the investing business for over 80 years through conducting field research firsthand with companies, utilizing risk management, and employing a bevy of experienced portfolio managers carrying an average of 22 years of experience.
For more news, information, and analysis, visit the Active ETF Channel.