The month of July, and some of August, offered a brief reprieve from the Bearish sentiment that has dominated public markets since the beginning of the year. Unfortunately, for most investors, that reprieve did not last and capital flowed back to treasuries and other short term instruments. By September 30th the most broadly held Balanced funds in Canada were down over 14% on the year.
When investing in individual companies our portfolio management team is not guided by near term market volatility, rather by the potential for the individual companies we own to generate revenue and grow earnings. Occasionally we seek opportunities to capitalize on market weakness (or strength) by adding to or trimming from the names that we own. What we see today is a market of opportunity, but also one that requires patience. The global economy is adjusting to a new reality: one where money is no longer cheap, and neither are goods or services. That said, public markets may have priced in a more severe recession than is before us. Companies are still hiring, and economies are still expanding rather than contracting. The consequences of overspending will certainly come home to roost for many people in the coming months, but the fundamental underpinnings of our economies in North America are robust. We anticipate some continued equity volatility in the near term, with a strong recovery in the medium term. Meanwhile earnings season is upon us, which gives us a great opportunity to sensibly evaluate the companies we own as well as the ones that we don’t. There are lots of attractive names out there for the taking and good things come to the disciplined and patient.
Finally, our three Private Investment Strategies posted positive results again in Q3 2022: Rockridge Private Debt returned 1.7%; Forsyth Private Real Estate 2.35%; and Laurier Private Equity 1.34%. The chart below reflects the performance of these 3 pools from January 1st to October 31st this year.
-The Gilman Deters Team
I have prepared this commentary to give you my thoughts on various investment alternatives and considerations which may be relevant to your portfolio. This commentary reflects my opinions alone and may not reflect the views of Harbourfront Wealth Management. In expressing these opinions, I bring my best judgment and professional experience from the perspective of someone who surveys a broad range of investments. Therefore, this report should be viewed as a reflection of my informed opinions rather than analyses produced by HarbourfrontWealth Management Inc.”
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