Happy New Year to you all!
It has been an incredibly challenging year, for both the markets and many of us personally, financially and emotionally. We are extremely pleased that the “fortress portfolios” we have constructed for our valued clients have worked at minimizing downside risk.
While we know it may sound like a broken record at times, but the pillars of deliberate practice and a well-defined process are meant to withstand turbulence and uncertainty. Risks in the market are inevitable and remain elevated. Yet your portfolios have been structured to perform across the range of potential outcomes so that your long-term financial goals are able to be met.
Although the fourth quarter market performance was positive, and we have started off 2023 continuing that trend, we are still seeing more risk than reward in the markets. We maintain a healthy and conservative stance, focusing on stable and lower volatility assets. Also strategies that provide meaningful combinations of income, diversification, inflation protection and risk mitigation.
Year-to date performance and risk of Multi-Asset Reference Portfolios, for comparison, have been updated as follows:
Portfolio Description Total Return Risk (3Y Standard Deviation)
Conservative 60% Bonds, 40% Equities (10.21%) 9.5%
Moderate 50% Bonds, 50% Equities (10.20%) 10.4%
Balanced 40% Bonds, 60% Equities (10.19%) 11.4%
Growth 30% Bonds, 70% Equities (10.18%) 12.4%
Aggressive 20% Bonds, 80% Equities (10.17%) 13.5%
Most of our clients fit into either the Moderate or the Balanced category if you are looking to compare the performance of your portfolio to its relevant benchmark. Please let us know should you have any questions and we look forward to catching up at your forthcoming 2022 review and 2023 planning meetings.
We cannot thank you enough for the continued support and trust you have placed upon us as stewards and fiduciaries of your long-term investment capital.
We wish you all a healthy and prosperous Year of the Rabbit.
Steve, Jon & Catherine