Jim Lowell, editor-in-chief of Fidelity Investor, recently appeared on CNBC to discuss Tuesday’s trading action and where you should look to put your money during the market’s current indecisiveness.
Jim says that the market is chasing its tail ahead of today’s ADP private sector report, which is a precursor to Friday’s anticipated jobs report. The health of our jobs markets is what’s on investors’ minds, especially after Federal Reserve Chair Janet Yellen’s speech at the University of Massachusetts at Amherst.
No matter what happens in those jobs numbers, Jim says, he wouldn’t be surprised if the market does trend a little bit lower, mostly based on fear. However, there is no fundamental evidence that good, active managers would not be able to benefit from very steep sell offs.
Take the biotech sector, for example, which recently sold off based on a Clinton tweet and follow-up calls for congressional subpoenas for Valeant Pharmaceuticals (VRX). The fund Jim is currently using to access this sector is Hartford Healthcare Fund (HGHAX), which has 32% of its assets in biotechnology names.
Jim points to his confidence in the managers of this fund and their ability to balance biotech risk and opportunity with broader-based, slightly lower-risked healthcare holdings. Top holdings in this fund include Bristol-Myers Squibb (BMY), Medtronic (MDT) and Allergan (AGN).
Check out the video above for more.