The first video in our series continues to feature a few interesting and curious things that crossed Brent’s desk during the quarter. Brent highlights the thoughts of Jack Bogle (who, sadly, passed away on Jan. 16th) of Vanguard regarding Passive vs. Active investing and what the future may look like if passive investing continues to grow and attains a critical mass of assets. You’ll see an interesting chart showing the changing size of each sector of the S&P 500 since the 2008 market crash and another chart showing that more than 50% of stocks in the S&P are in bear market territory right now. You might be interested to hear what the phrase “bear market” really means and why it’s used!
In Part 2, Brent gives a high-level synopsis of the markets. You’ll see how 2018 was a very challenging year, one of the worst years in recent history. We experienced, for the first time since 2000, two separate drawdowns of more than 10%. Value stocks, which we generally favour, were down as well, but not as much as Growth stocks. These declines were broadly felt across all sectors…a reminder that it was across the board and not a result of investment selection. Now, How we react to declines and ensuring we’re not guided by emotions alone, is the key to our success going forward.
In Part 3, the final video in our series, Brent describes the Vandermeer Wealth Management portfolio strategy and the performance of our model portfolios. We’ve moved our asset allocation to a neutral position (no longer overweight equities) to mitigate negative market performance. There have been no changes to positions in the portfolios in Q4 and we remain very confident in the investments and businesses we own. We may not have seen large upside gains this year, but we’re experiencing significantly less downside. We are really pleased with this as it’s long been our objective to minimize volatility to help you stay the course.
Stay tuned for a webcast about alternative investing and what we’re doing in that model portfolio. Think commodities, physical real estate, and market neutral hedge funds. Why is this important? Because they move in different directions from the market and can provide sustainable returns that add value to the overall portfolio.