If you are making a long-term investment, the best thing you can do is get out of this wave of instability.
“Stay invested,” says Sima Shah, chief strategist at Principal Global Investors. Shah told CNN Business that the Delta version is unlikely to halt economic recovery in the United States and other parts of the developed world where vaccinations are high.
“The vaccine is effective,” he said. “If the number of cases increases but the level of hospitalization remains low, government reopening measures will continue.”
However, Shah acknowledged that investors needed to be more selective. After all, the S&P 500 almost doubled from its lowest level in March 2020, not all stocks and sectors will keep pace.
He thinks that the defense spheres can be withdrawn a little. These include utilities, healthcare և other companies that pay large dividends և are considered to be a good bond proxy.
He said FAANGs, other large technology stocks, many of which have high revenue streams and tons of cash, should continue to accumulate.
This is not the time to bet on the market
“Airlines have been beaten,” Shah said. “But if you assume that the reopening will continue, they should have a significant setback.”
Shares may remain volatile in the foreseeable future, but that should not deter investors from sticking to their long-term investments.
“The uncertainty of the past few days is short-lived,” said Peter van der Veel, a multifunctional strategist at Robeco. “But there must be a second round of inflation.”
Van der Veel noted that there are many reasons to be optimistic about the continued growth of consumer spending and retail sales, despite the recent decline in consumer confidence.
Any heat from consumers or investors can be transient.
“If you are a long-term investor, take advantage of this volatility; increase the position of companies և areas that you really like,” says Phil Orlando, chief stock officer of the Federal Hermes stock market.
He believes that the shares of the cyclical industry, which were hit by Delta, are afraid that they may enjoy the biggest gains.
“There are stocks that have hit the air pocket, which can be very attractive. “We love the economically sensitive sectors,” Orlando said, adding that banks, other financial and industrial enterprises, and retail and energy resources may be booming again.