Our weighted average return in December was -8.26%. Since 2015, we have generated a net return of +27.65%.
In terms of investment strategy performance, our weighted average net returns for December were (a) -0.11% for conservative strategies, (b) -5.83% for balanced strategies, and (c) -13.14% for aggressive strategies.
December was the worst month for the S&P 500 index (-9.18%) since February of 2009, capping off a year that generated negative returns in all asset classes except short-term US government debt.
‘Uncertainty’ continues to be the most commonly used term to describe the current price action in capital markets. ‘Uncertainty’ about the US-China trade dispute. ‘Uncertainty’ about the Eurozone. ‘Uncertainty’ about Brexit. ‘Uncertainty’ about the US government shut down. ‘Uncertainty’ about whether the US Fed will pay heed to markets.
No one is immune from doubt, nor or should they be. However, the only thing in capital markets that is ‘certain’ is the past and that too is subject to innumerable interpretations.
So where do we go from here? Well, since US Fed Chairman Powell mentioned that the Fed was “listening closely to markets” on January 4th, financial markets have been in a considerably better mood. As I write this commentary, our weighted average return for January is around +5%. On a standalone basis, this would be a phenomenal result, but in the context of last month’s price action, we will call it ‘progress’.
Going forward, we will be closely monitoring Q4 earnings, not only for our portfolio holdings, but across all sectors. We will be trying to determine whether the Q4 selloff and market panic matched the actual performance of companies across all sectors of the US economy. We will be paying close attention to management commentary and guidance. We will be paying particular attention to the amount of revenues that US companies are generating abroad. We will be also be focusing on corporate vision and execution.
Market sell offs are extremely destructive to investor confidence, but well run companies should not be making decisions based on the short-term movements of their share price. I am certain that Amazon.com has not had a single meeting about the fact that their shares had fallen 36% from their highest to lowest point over the past three months. I am also fairly certain that buying Amazon.com shares under $1500 per share will prove to be a very profitable investment.
On behalf of our Client Portfolio Management team, I thank you for your continued trust and support!
FULL DISCLOSURE: Please note that the opinions expressed in this blog should in no way be considered as investment advice or a solicitation to buy or sell securities.