by Salman Ahmed

The last two weeks have not been for the faint of heart. Equity markets have fallen sharply as investors respond to new information about the coronavirus and its broader economic impacts. A couple of days have bucked the trend but not enough to stem the losses. At Steadyhand, we’re doing what we’ve done in previous periods of market tumult – sticking to our investment process and taking a long-term view (5+ years). In the Founders Fund, we’re using cash on hand to rebalance our weight in stocks so that it doesn’t fall too far below our 60% target.

Our equity managers have also been rebalancing. They’re adding to holdings that have fared worse than others. It’s worth noting that all our managers invest in companies with lower levels of debt, which should help if an economic slowdown extends longer than expected.

A few new opportunities have emerged too. Our Global Equity Fund has added three new companies and our Equity Fund has bought two. There isn’t a theme to the purchases. They include companies in insurance, technology, and data. These purchases reflect what we’ve mentioned in our outlook – there are pockets of opportunity, but valuations remain average in general.

We don’t think it’s time to get too aggressive or defensive right now. We’re advising clients to rebalance their equity holdings so they don’t fall too far below their target. If you’re in the Founders Fund, we’re already doing this for you. Growth-oriented investors, meanwhile, should not take their foot off the pedal. Keep adding to your portfolio – every market dip is a gift.

As always, please get in touch with us if you’d like to talk about the specifics of your portfolio.