A contested U.S. election was of grave concern to many market watchers, in part due to President Donald Trump’s threats on the topic coupled with the volatility and uncertainty it would create. A contested election could go on for days or even weeks and result in much rhetoric from both parties, creating a very unstable economic and financial climate in the U.S. and across the globe.
We will have to wait and see over the coming days how exactly this scenario will play itself out, but you should be reassured that along with our portfolio managers, we are closely watching these events and will make the necessary decisions to preserve capital in our portfolios. Like many other things, this will pass with time and we need to remain patient and not panic.
Markets don’t like uncertainty. The resulting doubt this creates for an orderly transfer of power – should one come to pass – is bound to affect the markets, potentially upending investor confidence.
More than ever it will be important to stay calm through this time and avoid any hasty decisions with your portfolios that could adversely affect your long-term financial well-being.
We’ve have been actively managing the asset allocation and investment strategies within the Counsel and IPC Private Wealth portfolios ahead of the U.S. election to tactically manage the potential risks we anticipated in several areas. The following is a quick highlight of some of the major broad tactical moves we’ve made to our asset allocation strategy:
In conclusion, we believe investors need to be extremely wary of the bets they are making in their portfolio and not extrapolate the current market conditions/themes too far into the future. In the short term, mood and momentum are driving stock returns, not valuation. Certainly, we want to participate in this and have several options to do so across our portfolio families. At the same time, we need to manage risk by being diversified across investment styles and factors so we’re able to harvest the market return.
Sincerely,
Corrado Tiralongo
Chief Investment Officer | Portfolio Manager
Counsel Portfolio Services | IPC Private Wealth
Sources: Picton Mahoney Asset Management, Putnam Investments & Titan Advisors
Investment Planning Counsel