With the myriad of headlines and uncertainty flooding your news feeds, I thought it best to reflect on our long-term strategy and short-term tactics within the portfolio. The attached slide deck briefly summarizes our thoughts on both.
Strategically and longer-term, we want to own business equity (ie. stocks) over bonds for greater income, more tax-efficient income, increasing income and ultimate capital gain. However, risk of recession is increasing which, in the short-term, may reduce the price of equity or ownership. These prices will rise and fall with the headline risks, but over time will be higher. Therefore, strategically, we always keep a margin of safety in no/low risk investments to fund your income and capital needs. And tactically, this margin of safety is used to not only withstand the headline risks and a drop in prices, but also, to invest in the opportunities that will invariably present themselves.
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