A recent study by Charles Schwab highlighted the changes that Covid-19 has brought about for active traders, ranking as the top reason for altering strategy, above inflation, Federal Reserve policy, and U.S. and China relations, reported the press release.
The study surveyed 500 traders, and over a third said that their trading strategies had changed because of the Delta variant, with 44% increasing their overall exposure to equities, 37% increasing exposure to cash, and 34% increasing exposure to fixed income.
Despite concerns of shrinking economic growth due to Delta, almost all of the traders reported that they would be trading at least the same amount, if not more, in the months to come. Many are increasingly doing more research, with 45% reporting that they do more research now than pre-pandemic times, spending an average of seven hours researching.
Over half of the respondents said they are turning to online news articles and commentary for research (58%), while 50% reported using research from their trading firms. 41% used information from business news outlets to help make investment decisions.
Most interesting to note, 86% of traders believed the stock market to be in a bubble, but a third still felt bullish for the second half of the year.
Growth stocks and value stocks saw about equal bullish interest, at 65% and 67% respectively, and sectors that the respondents felt would provide the best performance if a reopening were to occur were information technology, healthcare, financials, and energy, followed by real estate.
The biggest areas of concern for volatility were financials and healthcare, followed by real estate, information technology, and consumer discretionary. The overlap reflects the concern of volatility, but also the potential for higher returns because of volatility.
T. Rowe Price believes in the difference and benefits to active investing and active management. The firm currently offers five actively managed ETFs for investors that are looking to invest in the midst of Delta concerns and fluctuating markets. The firm brings a bevy of experience and research to its products, with portfolio managers averaging over 20 years in investing each, as well as over 400 investment professionals dedicated to researching companies within ETFs.
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