We understand periods of volatility are unnerving and stressful. We’re here to answer any questions you have.
The Corona virus and its impact on economic activity continues to drive the market downturn this year.
Portfolios remain well diversified; you own good companies that have strong balance sheets. They will weather this storm.
We’ve made changes to the portfolio to increase safety:
- We have reduced your Enhanced Income (Corporate bonds, preferred shares, etc.) exposure by 50% in favour of the traditional bond portfolio (predominately government bonds).
- We’ve reduced the currency protection (or hedge) on the US dollar which allows you to benefit from a falling Canadian dollar and rising US dollar.
- Managers of the investment pools have taken on larger cash weightings over the last 6 weeks.
Portfolios are down 1-4% depending on asset mix so far this year with markets down 5-10% since January 1 to the close Friday. This will be lower after today.
The US market (S&P 500) has returned more than 300% over the last 10 years, some of that is being given back now, but a fraction in comparison to what has been a growing economy and market for the last decade. Market volatility, regardless of what triggered it, is part of the investment cycle.
Central banks are working to support the economy with interest rate cuts and injections of liquidity.
This will pass. Our investment managers are actively looking for opportunities to either add or upgrade the companies owned in the portfolio.
Don’t hesitate to call us and thank you for the continued trust and confidence you’ve placed in us.
Mike & Rob