"I didn’t wait for Warren Buffett or some other big name to announce how many billions they’re investing in this suddenly weaker market; I’d already started to put money to work in my fund amid the downturn," says Sammy Simnegar, portfolio manager of Fidelity® International Capital Appreciation Fund (FIVFX).
Simnegar acknowledges the market remains very uncertain and he doesn't know when stocks might find a bottom. The economy could take a notable near-term hit because of efforts to contain the coronavirus and he says "it's probably not going to feel comfortable" for investors in the near term.
"That said, I'm seeing mid-teens normalized earnings for a lot of high-quality companies, so I've been buying stocks I think could look better than they do now 3 to 5 years out," states Simnegar.
Reasons for optimism over this time frame, he says, include what he sees as meaningful action being taken by state and local governments to limit the spread of the coronavirus. He's also encouraged by steps to boost market liquidity, stimulus efforts by multiple governments around the world, and lower oil prices that could help consumers.
The strategy he’s begun to use in the fund is to rebalance and reinvest at regular intervals. He expects to continue this strategy in subsequent weeks as well.
"I invest this way because we've done lots of research that suggests hunting for a bottom doesn't work," he says. "What does work is dollar-cost averaging, provided you can buy stocks for the long term at good prices, and as of mid-to-late March, that's precisely the opportunity I see."
Learn more about this manager and his fund
Sammy Simnegar is portfolio manager of Fidelity® International Capital Appreciation Fund.
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