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Passive Investing in Volatile Markets: Experts Think About It

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Investors often hear that despite a market crash, stocks tend to go up over time. But say that to investors who are watching their portfolios decline, especially if they are passively investing in index funds. Those represent groups of stocks that track indices like the S&P; 500 (^ Salafist Group for Preaching and Combat), Nasdaq (^ninth), or the Dow Jones Industrial Average (^ DJI).

Continuing with Yahoo Finance’s “What to Do in a Bear Market” series, we asked experts what they think of investing in indexes during these volatile times.

The markets have been hit this year. Passive investors in underwater index funds. Is the investment index over?

“Generally speaking, it’s not a good idea to try to time the market, whether you’re buying an index fund or an actively managed fund. When the market is down, that’s often the best time to invest money in the long-term business,” said Jim Polk, Head of Investments. Stocks at Homestead Advisers, for Yahoo Finance, over the past decade plus we’ve been in a period of cheap money where fundamentals were less important.

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“Almost all stocks were going up, so the presence in the index was good. The more assets that poured into the index fund, the more the fund had to buy what it already owned, creating a virtuous circle,” he added.

Meanwhile, Terry Sandvin, chief equity strategist at US Bank Wealth Management, said, “History shows that investors with long time horizons tend to generate positive returns as year-to-year volatility of returns, both positive and negative, is wiped out from the bottom line. Long time. period. This applies to both active and passive investment styles.”

Should investors be more picky when investing?

“Investors should always be selective when investing, although in a climate of high uncertainty and low expected returns, doing so becomes even more important.” Daniel Berkowitzchief investment officer of prudent management partnersfor Yahoo Finance.

With interest rates rising, we believe the investment environment will be more challenging than it has been in the past few years. “The market will differentiate between companies and stocks a lot more than it has in the past few years,” said Polk of Homestead Advisors.

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“As active managers, we believe there is value to knowing what you own and applying a disciplined process to identifying high-persuasion opportunities. With this changing market dynamics, more value will be given to active managers who can differentiate themselves from the benchmark.”

How do investors search for and select winning assets?

“Not all stocks are placed equally. Terry Sandvin, chief equity strategist at US Bank Wealth Management, told Yahoo Finance that ‘winner’ stocks are those that align best with investors’ goals, ranging from international versus domestic, to large companies Small business versus growth versus value patterns and asset allocation mix.

“Ultimately, companies need to have consistent revenue growth to purposefully go up. Other factors include balance sheet strength, capital requirements, cash flow, competitive landscape, etc.

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For investors who use actively managed strategies in particular, “holding them through full market cycles is critical to success. Determining winning managers up front is a challenge, but only half the battle,” Berkowitz said. prudent management partners.

“It is very easy to salvage an actively managed strategy in which the market is underperforming significantly in a given year, or even on a 3-year horizon, but even the most successful of the active strategies experience this kind of underperformance — it’s a normal part of investing,” he He said.

Ines is a markets reporter covering stocks from the bottom of the New York Stock Exchange. Follow her on Twitter at Tweet embed

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Food commodities are getting cheaper – unlike grocery bills

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Prices have fallen, but rising energy costs and production concerns are keeping costs to consumers high

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Apple is making plans to move production out of China

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in recent weeks, apple a company It has accelerated plans to shift some of its production out of China, the country long dominant in the supply chain that built the world’s most valuable company, say the people involved in the discussions. They say it tells suppliers to plan more actively to assemble Apple products elsewhere in Asia, particularly India and Vietnam, and look to reduce reliance on Taiwanese-led assemblers. Foxconn technology group.

Unrest in a place called iPhone City helped drive Apple’s turnaround. In a giant city within a city in Zhengzhou, China, up to 300,000 workers work at a Foxconn-run factory making iPhones and other Apple products. At one point, it alone made about 85% of the Pro lineup of iPhones, according to market research firm Counterpoint Research.

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Countries split over focus on plastics treaty as UN talks close by Reuters

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© Reuters. A plastic bottle lies on the sand at Macarese Beach, west of Rome, Italy November 21, 2018. (Reuters/Max Rossi)

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By Valerie Volkovici

WASHINGTON (Reuters) – The first round of negotiations on a global plastics treaty concluded on Friday with an agreement to end plastic pollution, but disagreement over whether goals and efforts should be global and mandatory, or voluntary and state-led.

More than 2,000 delegates from 160 countries, convening in Uruguay for the first of five planned sessions of the Intergovernmental Negotiating Committee (INC), aim to craft the first legally binding agreement on plastic pollution by the end of 2024.

The negotiations took place in the coastal city of Punta del Este pitting a “highly ambitious coalition” of members of the European Union against countries including the United States and Saudi Arabia, which own the world’s largest plastics and petrochemical companies.

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UN Secretary-General Antonio Guterres, who has said plastic is a “fossil fuel in another form,” urged countries to crack down on pollution and production.

“I call on countries to look beyond waste and turn the tap on plastic,” he said on Twitter.

Members of the United Nations agreed in March to create a treaty to deal with the scourge of plastic waste, but they disagree on key issues, including whether to reduce plastic production, phase out types of plastic, and harmonize global rules.

The High Ambition coalition of more than 40 countries, including EU members Switzerland and host Uruguay and Ghana, wants the treaty to be based on mandatory global measures, including production restrictions.

“Without a common international regulatory framework, we will not be able to meet the global and growing challenge of plastic pollution,” Switzerland said in its position statement.

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This approach contrasts with the state-driven pledges advocated by countries such as the United States and Saudi Arabia.

“The United States is committed to working with governments and other stakeholders throughout the INC process to develop an ambitious, innovative, and country-oriented global agreement,” a State Department spokesperson said in a statement.

‘Potential weakening of obligations’

Washington said it wanted the agreement to resemble the structure of the Paris climate agreement, in which countries set their own greenhouse gas reduction targets and action plans.

Saudi Arabia has said it wants a treaty focused on plastic litter built on a “bottom-up approach and based on national circumstances”.

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Critics say such an approach would weaken the global treaty.

“Although there are some staunch opponents of global norms and standards they are in the minority, which could weaken countries’ obligations to take action,” said Eric Lindbergh, WWF’s Global Head of Plastics Policy.

Industry representatives at the talks touted the essential role of plastics in everyday life, and called for the treaty to focus on waste management rather than measures that drain production.

“At the end of the day, we hope the committee will come to the same conclusion we did, which is that increasing recycling offers the best solution to reducing plastic waste,” said Matt Seeholm, President and CEO of the Plastics Industry Association.

Environmental group Greenpeace said that without a strong treaty, plastic production could double within the next 10 to 15 years, and triple by 2050.

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Even as some countries are divided over the approach the treaty should take, some observers said there appears to be growing agreement that plastic pollution isn’t just about waste that ends up in the ocean.

“Plastic is no longer seen as just a marine litter issue. People discuss plastic as a material made of chemicals,” said Vito Ponsanti, policy advisor for the International Pollutant Elimination Network. “There was a shift in the narrative.”

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