by Kevin Slater, CEO, Lead Advisor, CFP®
When it comes to portfolio management, SoundView does not attempt to beat the market by making lots of short-term trades. We believe strategic investing based on long-term trends generates great long-term results.
This quarter we have made a handful of changes to our allocations, some of which required making no trades whatsoever!
On the equity side, we have increased our bias to US stocks in moderate and conservative portfolios. We retain a significant allocation to International developed markets but slightly less so. We aren’t trying to guess which (US or International) market will do better this year, we just think the US will outperform more often than it underperforms. Due to the returns of 2023, many portfolios saw little to no trading driven by this change.
In more aggressive portfolios, we reduced our allocation to emerging markets and eliminated our exposure to China. The combination of internal Chinese policies, global politics, and a shift in production away from China by many global corporations does not bode well. Is there money to be made there? Possibly. We believe there are better, more promising options for those with the stomach for the wild swings in returns emerging markets tend to produce.
On the fixed income side, we made a few trades to increase yields without taking much more risk. We are believers of the maxim “don’t fight the Fed!”. So, our combination of funds remains very conservative with relatively short maturities.
We anticipate further small changes later this year. We are looking at ways to better diversify our large cap US holdings in a period that has been dominated by a handful of big firms (see this month’s article on the Magnificent Seven). We will see where the Fed takes interest rates before we make more changes to the fixed income side.
We continue to review investment opportunities outside of the core liquid portfolio. These often require higher minimum investments and/or a willingness to be tied up in illiquid funds for a long period of time. We will reach out to you if we find something that is both an attractive investment and suitable for your situation.
Please let us know if you have any questions.