InvestSMART's Performance for the month of February
International Equities Portfolio
Property and Infrastructure Portfolio
The market and investors swing from times of euphoria and despair, driven by macro economic, geo-policitcal and central bank gyrations and amplified by the news and social media cycle. Right now, the headlines would suggest it is a time for investors to play defence.
The most recent attention grabbing headline is from a bank up until last week most of us had never heard of and probably would never have had it not been for it's mismanagement of its bond portfolio as Phil Bish eloquently explains here. But let's take a step back and consider our exposure to the collapse of SVB.
The InvestSMART Diversified Portfolios have zero direct exposure to SVB and it's venture capital/tech clients. The international shares exposure is via the Vanguard MSCI Index International Shares ETF (VGS). This ETF holds over 1,400 companies around the world. Apple is the largest holding at approximately 4%, Microsoft second at 3%.
In total there are only six companies in the ETF in excess of 1% of the portfolio, the remaining 1,394-ish are well below 1% of the portfolio giving investing incredible diversification. Additionally, these are the largest, most profitable businesses in the world, far from tech start-ups.
When it comes to investing it is as important to play defence as it is offence. Part of our defence against situations like SVB is broad diversification in well established businesses and markets. The other part of defence is for investors to hold for the long-term and look through these attention capturing headlines.
Additionally, for those with long investment time horizons and some spare cash it pays to go on the offensive adding to your investments while everyone else is on the back foot.
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