Well this week saw another significant move in equity markets -to the downside- with declines across the board of 2-4%. Yet our model portfolios fared considerably better, at only half these amounts. This is the result of a balanced approach that includes lower risk asset classes including government and corporate bonds and infrastructure. Assets that protect capital also lower overall portfolio risk, ensuring you stay invested through market cycles. And remember, staying invested is crucial to achieving long term growth.
It’s easy to get caught up in the doom and gloom that suddenly is all around us, but the reality is that economic fundamentals are pretty good for the most part. Interest rates are low, domestic consumption is strong, wages are up and inflation is non-existent. All of these are good for continued economic expansion. The attached article from the Templeton Group adds additional support for our more optimistic outlook and can be read here.
Tuning out the noise is hard to do, where the news media is screaming fire. Just know that they want us to all scream to drive up their ratings. So take deep breaths and calmly change the channel. When you are ready to turn the TV on again, the media will have moved on to a new subject. And your portfolio will be just fine.