View from the Chair: Windermere’s Market Perspectives (November 2019)

November 10, 2019

Here we are again…after months of volatility and discussion of an impending recession, many markets have once again reached all-time highs. Such a sharp turn upward to asset prices in 2019 has many once again asking, “what now?”

Here are a few things we are keeping in mind as we serve our clients in this exciting time :

1.) Monitor concentrations – in times of market accelerations, certain positions can become oversized in relation to others. Of course, there are many accompanying factors to consider as well before trimming a position (including outlook for business, unrealized tax position, and opportunities for reinvestment to name a few). However, we are always looking for concentrations and trimming winners as appropriate

2.) Rebalance – this is a commonly referenced strategy – likely because it has been proven to work over time. Rebalancing is the act of selling and buying within asset classes to return you to your longer term target allocation. This has the effect of forcing you to sell high (by trimming asset classes that have gone up and are now over target) and buying low (adding those funds to asset classes that are under target). This process can remove emotion from the equation and make it easier to adhere to your longer-term plan

3.) Revisit your financial plan – even though markets are reaching all-time highs, it is also no secret that expected returns over the next several years will fall short of those in recent past. Why? Simply put – slower growth around the globe. This leads to lower interest rates and in turn, lower returns on all asset classes. It’s a good idea to revisit your longer term plan at least once a year and determine what rate of return you need on your investments – and whether your current asset mix can achieve that

4.) Hunt for bargains – in an upward slopping market, it can sometimes feel as if everything is overpriced. This just isn’t the case. We are always on the look out for investments that are trading below our estimate of fair value. Even in an up market, bargains may appear!

5.) Stay engaged – It can be easy to relax a bit as markets reach all-time highs. We can congratulate ourselves for staying in during some pretty unnerving periods (remember Christmas Eve 2018?) and enjoy watching our balances climb. Resist this urge. Now more than ever is a great opportunity to stay engaged and active with your portfolios. Markets never stop- and neither can we.

Invest on,


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