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Preparing for the Next Cycle
Wayne Gillespie • April 19, 2023
In his Q1 update, Wayne Gillespie discusses the potential impact of the U.S. banking situation on the markets and how Counsel's Portfolio Managment Team is preparing for the next cycle.
“Investors should look at the coming months as investment opportunities rather than obstacles to avoid.”
Here are a few highlights:
- The full effects of monetary tightening continue to lag and we expect investor confidence to be tested as the markets reevaluate the effects of slowing economic growth.
- In the U.S., stocks managed to shrug off the worst U.S. bank failures since the 2008 fiscal crisis with all three main U.S. equity benchmarks finishing the first quarter in positive territory.
- A program-wide rebalance occurred over the period, changing our asset allocations to neutral-to-overweight fixed income and equities. Our Portfolio Management team has been allowing drift to occur to maintain exposure to assets with the most positive momentum.
- The near-term outlook remains uncertain. U.S. Financial institutions are experiencing significant issues, meaning financial markets will remain volatile.
- At this time, we believe that the Central banks are well equipped to deal with the liquidity issues arising from any banking crisis.
- We have positioned portfolios in anticipation of this storm and will use this opportunity to prepare ourselves for the next cycle. Investors should also look at the coming months as investment opportunities rather than obstacles to avoid.
- Going forward, we believe a diversified portfolio provides you with the best opportunity for growth while maintaining exposure to strategies that can help protect against volatility.
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