Quarterly update | 1Q 2018 | EP04
This episode features insights on the past quarter (1Q18) by Greg Peterson, portfolio manager of Mawer’s balanced and global balanced strategies.
- The currency translation effect on Canadian equities
- The biggest factors for finding a margin of safety for investors
- Mawer’s asset mix changes – back to a neutral 60/40
- How the credit market is functioning
- Influencers that may cause market volatility going forward
A transcript of this episode is available below, modified for a more enjoyable reading experience. For more posts exploring the ideas we talk about in the episode, check out our Related Reads links.
- Guest Speakers
1:02 – All about currency:
- The translation effect for Canadian invested in foreign equities
- NAFTA, monetary policy expectations, energy prices (WTI)are all working against the Canadian dollar
- International investors’ effect on Canadian equities
4:21 – What bank valuations say about how people are feeling about Canadian banks
“The interesting thing is that valuations or returns may reflect more expectations or concerns than the real numbers.”
5:24 – The biggest factors right now for finding a margin of safety for investors: diversify portfolios
6:42 – Mawer asset mix changes over the quarter: moving to a more neutral stance
- Reducing equities (60% equity and 40% fixed income)
- Reducing U.S. equity weight
- “Volatility is not the reason in and of itself to reduce equities.”
8:06 – Discussion on the difference between volatility and risk and Mawer’s approach to both
10:25 – Looking forward: the influencers that may cause market volatility to continue
- Full valuations
- Reactions to negative noise/news (NAFTA, U.S./China tariffs)
12:30 – Signs on where we are heading can be seen early on in the credit markets. How the credit markets were functioning over the quarter.
13:53 – Turning to the positives. What could keep the cycle going longer.
15:35 – The tipping point: when bonds look more attractive than equities
17:07 – A 60/40 asset mix and why investors should hold bonds
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