5-star manager David Giroux explains why more companies' businesses are at risk.
How concerned are you about stock market risk? Have occasional eight hundred point drops in the Dow, corrections in various indices, presidential tweets and trade disputes had you reaching for your Pepto-Bismol or Valium?
Market volatility has definitely picked up in the last year or so. Not an unusual occurrence. There have been many rocky periods, plus several euphoric highs and nail-biting lows during the long bull market that began in 2009. But those are not the risks that this week’s guest is focusing on. He is looking at much more fundamental, structural changes that he says are affecting the long-term future of specific companies, lots of them.
He is David Giroux, Portfolio Manager and Chairman of the Investment Advisory Committee of T. Rowe Price Capital Appreciation Fund which is a Morningstar Gold Medalist and carries a Five-Star rating. Giroux was namedMorningstar’s Allocation and Alternatives Fund Manager of the Year in 2017, the second time he was so honored and has been nominated for the award several other times.
It is Giroux’s role as Head of Investment Strategy at T. Rowe Price that is the focus of much of today’s conversation because he is leading research projects across T. Rowe Price’s investment platform and asset classes. One of his major efforts is identifying secular risk in companies and avoiding companies that have it. He and his team estimate that over a third of S&P 500 companies are facing risks that will result in lower performance over the next ten years and that their numbers are increasing.
