Strategy: Investing in a volatile market

Traders work on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters
Traders work on the floor of the New York Stock Exchange.

Andrew Burkly, head of institutional portfolio strategy at Oppenheimer, says investors can use the recent volatility to their advantage.

As the Federal Reserve prepares to begin a tightening cycle by potentially increasing rates as early as Thursday, equity markets in the U.S. and around world have been confronted with heightened volatility due to sluggish economic trends, particularly from China.

In the past three months, for example, the CBOE volatility index, a measure of market risk often referred as the "investor fear gauge," is up over 50 percent.

Despite the recent spike in volatility, some investors and economists believe that market turbulence may be here to stay, especially amid a higher rate environment, which could trigger a capital flight from riskier assets such as emerging economies into more stable names.

"We still think that U.S. equities are going through this bottoming pattern that may take a few more weeks to play out," said Burkly, whose group oversees $87 billion in assets under management.

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