Who says the stock picker is dead? As volatility has returned to the markets, investors would be wise to turn to active management over passive management, one market watcher argues.
While the market has managed to recoup most of its losses since the February lows, investors would be wise to consider active management, said Michael Bapis, partner and managing director at the Bapis Group at HighTower Advisors. Here are his reasons why.
• There’s been a recent transition to active management and investing, and that’s more important than ever given the volatility.
• Active management relies on selecting individual investments, like single stocks, rather than putting money to work in a passive investment vehicle like exchange-traded funds, which tend to be relatively inexpensive.
• Active managers can select individual equities in a difficult market. Last year was a historically strong time for the market, and it’s gotten rockier in 2018.
• Active management will not go away; investors are willing to spend more to seek better-than-average performance as volatility rises.
Bottom line: According to one money manager, there is a renewed focus on the importance of active management amid recent market volatility.