The market's recent volatility shouldn't deter investors from seeking opportunities in stocks, it just might take more careful analysis.
Tariffs, slowing GDP growth, and a hawkish Fed policy led by Jerome Powell has led to significant declines in companies across the housing sector, the technology sector, and semiconductors among others.
However, investors shouldn't be scared by the defensive alignment of market minds, Alphaclone CEO Maz Jadallah told TheStreet, as opportunity still remains.
"Investors need to start being more selective," he told Real Money's Kevin Curran. "The best defense is a good offense."
Jadallah suggested more active strategies in order to take high conviction plays, rather than the passive strategies that have outperformed in the protracted U.S. bull market of late, something he seeks to do through his AlphaClone Alternative Alpha ETF strategy (ALFA) .
He noted that the market has shifted toward fundamentals as of late, meaning managers must shift their focus. A market-cap weighted index is no longer an adequate strategy amid the shift.
As high-flying growth stocks with high multiples, like the FAANG names, have come down significantly in the fourth quarter so far, traditionally safer sectors like pharmaceuticals, healthcare, and financials have been steadily bolstered.
Jadallah added that the consumer discretionary sector is also garnering a great deal of attention from some of the smartest managers that he tracks.
To hear more about how to play the market's recent correction check out TheStreet's interview with Jadallah above.