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If there’s one problem with T. Rowe Price (NASDAQ: TROW) as an investment, it’s that the company’s performance ebbs and flows with the fortunes of Wall Street. That connection is inherent to its asset management business, but it can lead to steep stock price declines — which is exactly how you might describe the 50% drop the stock has taken from its 2021 peak. But for long-term income investors who think like contrarians, this could be a buying opportunity.
It is probably easiest to explain the type of investor who shouldn’t own shares of T. Rowe Price. If worrying about your investments keeps you up at night during bear markets, then this asset manager will be a terrible choice for your portfolio. Not only will you get to worry about the gyrations of Wall Street, but you’ll also have to ruminate on the fact that T. Rowe Price’s earnings tend to nosedive during market corrections. It’s unavoidable.
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