Stocks rebound, but concerns remain about economic recovery

Shares rebounded on Wednesday after closing in losses on six of the last seven trading days, with the S&P 500 ending the day about 1.2% below the all-time high earlier this month, the Wall Street Journal reported. Sentiment continues to resonate more widely among investors over concerns about a general pullback after strong performance for much of the year.

Hopes of a strong economic rebound have been hampered recently as the Delta variant wreaks havoc on the American population, while in China supply chain problems and the economic downturn have far-reaching implications for the United States. the global economy.

“We no longer worry about a premature tightening [by the Federal Reserve] killing the rally in equities to concerns about the strength of the recovery weighing on equities, ”said Sebastian Mackay, multi-asset fund manager at Invesco.

While sentiment remains positive for the long term, analysts are watching volatility in the interim as Delta continues to be a cause for concern.

“In the long term, we think stocks are the place to be, despite some volatility in the short term,” said George Mateyo, CIO of Key Private Bank. He believes the current slowdown in growth is consistent with moving into the middle stages of a boom cycle, as opposed to the more robust growth seen at the start of the recovery.

LVOL invests in low volatility securities

For investors who are increasingly concerned about the potential drawbacks, the American Century Low Volatility ETF (LVOL) could be a solution to consider, as it seeks to follow the market for the long term while offering less volatility, especially during a downturn.

LVOL is an actively managed fund that uses the S&P 500 as a benchmark. The fund seeks to provide lower volatility than the market as a whole by seeking asymmetric or downward volatility and investing in companies with strong and steady growth.

It seeks not only to reduce volatility at the portfolio level, but also in its individual securities. Portfolio managers seek to balance returns with risk management by evaluating individual securities and their place and performance within their industry and as a whole.

Securities are sold when they become less viable relative to other opportunities, the risk becomes greater than the potential return, or other events that may change its outlook.

LVOL has an expense ratio of 0.29%.

For more news, information and strategies, visit the Core Strategies channel.

Comments are closed.