How to manage market volatility with ETFs

With markets experiencing volatility stemming from geopolitical tensions and broad shifts in interest rate predictions, Bank of America Head of the Research Investment Committee Jared Woodard joins Wealth! to discuss the best ETF investment strategy for this environment.

Woodard highlights that ETFs are a valuable asset for investors who don’t want to take a strong view “on a particular slice of the market” amid persistent market volatility. He notes that investors often opt for ETFs focused on specific sectors instead of individual equities to mitigate volatility. However, he emphasizes that in broader macroeconomic conditions, ETFs are utilized as a hedge against long-term volatility that may arise from factors such as inflation.

In the current higher for longer rate environment, Woodard advises investors to consider lending certain segments of the market, which “can provide an income stream with less exposure” to higher interest rates. Additionally, he recommends commodities such as gold futures (GC=F), stating that “it’s an incredibly important part of a portfolio.”

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This post was written by Angel Smith