It really doesn’t seem to be Elon Musk’s day. Not only did shares of his EV company Tesla drop nearly 10% after posting disappointing earnings, but Microsoft has also announced that it is dropping Twitter from its advertising platform next week.
On top of that, in what could be interpreted as a metaphor that’s far too on the nose, SpaceX’s uncrewed Starship exploded roughly four minutes after takeoff.
But companies don’t exist in a vacuum. Remember the contagion issues with the world’s most boring banking crisis. Tesla’s plummeting share price dragged down other stocks, with the S&P 500 and tech-heavy Nasdaq Composite falling 0.6% and 0.8%, respectively, by the end of trading on Thursday.
“Other technology stocks showed signs of weakness. Nvidia, Microsoft, Meta Platforms, and Apple all finished lower,” wrote CNBC’s Samantha Subin and Alex Harring. “Seagate Technology shares lost more than 9% after missing estimates and issuing disappointing guidance, citing weak demand.”
Tesla’s (and Monk’s) terrible, horrible, no good, very bad day is yet another reminder that the activity of one company can impact entire sub-sectors and markets. That’s why it may be a good idea to have some active management in an investor’s portfolio.
See more: “Investors Continue Allocating to ETFs, Survey Says”
Active management can avoid trouble spots and pivot towards alpha if things go sideways as the result of one company experiencing lackluster profits. Plus, active managers with greater resources and greater scope benefit from economies of scale, which can often translate to better returns.
“Active managers have the flexibility to take advantage of market volatility and add to favored positions when prices become more attractive,” said VettaFi’s head of research Todd Rosenbluth.
As part of its lineup of active ETFs, 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).
T. Rowe Price has been in the investing business for over 80 years and conducts 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.