Picking up targets at better prices…
We thought we would update you on where we are in our decision making over the last few days and the days to come.
Over the summer of last year we took advantage of the relative weakness of the US Dollar and invested in key long term company holdings as part of our long term (strategic) belief that the US economy is where innovation and global growth is based. We were fully invested for the opportunity to make some profit.
We reviewed our position over the winter and in January we elected to take some profit and reinvest that money particularly into inflation linked fixed income, that would give us some exposure to making money if we got ‘surprise’ inflation. We didn’t slam on the brakes but we did take our foot off the gas.
Last week when we saw the scale of the tariff’s proposed we saw that as a sharp downward influence on risk assets. We were relatively positioned for that; but we were fully invested with only 2-3% in cash on most portfolios. So we elected to raise cash by selling our exposure to UK Gilts- that cash is now on portfolios.
The market moves across the globe have accelerated, but this ‘pull back’ gives us the chance to purchase holdings that were too expensive at the turn of the new year.
So over the next 10 working days we will be using the cash to bring clients back up to weight in risk assets that are long term investments that match our themes of Healthcare, ‘Shovel’ technology and taking an exposure to Commodities that have been significantly undervalued by investors. Healthcare and Technology will provide growth and Commodity companies (miners) provide capital growth but also a significant yield (natural income) contribution.
We will return portfolios to the amount in ‘stocks and shares’ as would be expected and then we will be patient to see if this is a short period of turbulence or if this is a fundamental change in the way international trade is structured, at which point we will further adjust.
We are comfortable that the decisions we’re making are keeping our portfolios suitably invested across all risk mandates. We will rarely ‘turnover a portfolio’ (Buy/Sell) by more than 20-40% in a year, and we have no plans for that to change- we need to be invested, strategically for the long term- but we are being active on your behalf during this time of volatility- we see opportunity, but we won’t take inappropriate risk.
Important Information
This article is for information only and does not constitute advice or recommendation and you should not make any investment decisions based on it. The views and opinions of this article are those of Casterbridge at the time of writing and may change without notice. Any opinions should not be viewed as indicating any guarantee of return from investments managed by Casterbridge nor as advice of any nature. It is important to remember that past performance and the value of an investment, and any income from it, may go down as well as up and the investor may not get back the original amount invested.
