The markets have been frightening, and investors are concerned. We are sure you have been worried too. We are writing to let you know that your portfolios are ok, and while they will not be totally inured from the worst onslaughts, they have resiliency.
We have been concerned for some time about the potential for a debt-induced recession. While we didn’t specifically forecast Trump tariffs , we structured our portfolios to take into account a wide range of potential outcomes. The TSX and S&P 500 so far in the first quarter are negative as of today. Our average account on the other hand is positive. Portfolio diversification, limited exposure to the hot areas of the market, and high cash balances have so far provided some stability.
The cash level in our equity portfolios is over 25 percent. This provides downside protection and the resources to take advantage of opportunities should the market around us continue to spiral. Cash will be a source of potential returns. In addition, your portfolio yields around three percent.
We maintain our vigilance but feel your portfolios will weather this market turmoil even if periodic rough patches loom ahead.
We are available if you want to discuss this further.
Yours Sincerely,
The Team at Heathbridge