It has been a very difficult month for investors, made worse so because both equities and bonds have suffered (leaving few places to hide).
In the attached video, I identify the 5 most common client questions that I am being asked right now – in the hopes that you find it informative.
We have been extremely active this year - doing our best to mitigate the situation. While performance so for has been challenging, our model portfolios are outperforming the averages in Canada (especially so on the more conservative end).
Success has come from selling off the majority of our higher risk growth stocks early on in the year, holding on to excess cash, holding gold and overweighting Canadian equity.
At the moment in our model portfolios, we are buying bonds (now yielding 3-4%), and looking to add to blue-chip equity names (Starbucks, NVDA, Danaher) all of which are down 20-40%.
Like in any market pullback, its less about what you can do in the moment to mitigate, but rather what you can do to take advantage of the sell off. We went though a similar period of volatility during COVID, where we saw losses of -15% in our Balanced portfolios between January 31st and March 23rd 2020.
The VERY next day (March 24th) the Dow Jones shot up by 2,100 points (-11.37%), the largest 1 day gain in points in history. This was followed two days later (March 26th) with the Dow gaining 1,300 points (+6.4%) – the 4th biggest point gain on record. As I’ve said to many clients this past week - It’s always darkest before the dawn.
- Your Creed Capital Management Team