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June 27, 2016 | Brexit & Second-Half 2016 Portfolio Positioning

Adrian Mastracci

Adrian Mastracci, Discretionary Portfolio Manager, B.E.E., MBA. My expertise in the investment and financial advisory profession began in 1972. I graduated with the Bachelor of Electrical Engineering from General Motors Institute in 1971. I then attended the University of British Columbia, graduating with the MBA in 1972. I have attained the “Discretionary Portfolio Manager” professional designation. I am committed to offering clients the highest standard of personal service by providing prompt, courteous and professional attention. My advice is objective, unbiased and without conflicts of interest. I’m part of a team that delivers comprehensive services and best value in managing client wealth.

“Behold the turtle. He makes progress only when he sticks his neck out.”
~James Bryant Conant, (1893 – 1978), American chemist.

Investors are on edge about the prognosis for Brexit and the second half 2016.
Plenty of disarray, uncertainty and chaos is gripping stock and bond markets.

Brexit has become an unprecedented fallout event for the Eurozone.
China’s data is heading into slowing growth.

Japan is slipping deeper into negative interest rates.
A wide variety of global indices have suffered tumultuous trading.

Companies will soon be reporting second quarter earnings and future guidance.
Revenue growth is the biggest challenge for companies in this environment.

The remaining central banks tools are losing effectiveness.
Best to assume the second half 2016 is not a cakewalk, so be well prepared.

Some currencies have developed their own wall of worries.
A sense of unease prevails as bond yields get even slimmer.

Investors may also be sticking their necks out like the turtle.
Some of the risks present opportunities for the strong willed.

Full implications have not been assessed as yet.
Consider these three pointers:

1.. You have no control over market behaviour, so hands off the panic buttons.
2.. You can only control how to interact with the markets by the risks taken.
3.. Successful investing requires a series of logical decisions, not emotional.

My seven positionings help steer around investing potholes, bumps and curves ahead:

1.. Expect to encounter more market mayhem, in both directions with little or no notice.
Accept short-term portfolio volatility as tradeoff for long-term investing potential.

2.. Uncertainty can muddy the markets all too quickly, so simplify your game plan.
Design your sensible asset mix targets and rebalance when funds are added or withdrawn.

3.. Many investors seek to achieve high returns.
The better approach is sticking with well-diversified, quality selections.

4.. Position the portfolio for low returns to continue well past 2016.
Keep bond ladder maturities under five years and sell some longer maturities.

5.. There are no shortages of investing strategies you can adopt.
My favourite is the contrarian buy some when prices fall, sell some when prices rise.

6.. Investors will appreciate having readily available cash as stocks go on “sale”.
Keep say 10% to 20% of portfolio value in cashable instruments and invest them in 5% tranches.

7.. Stop getting distracted by owning investments that are not a fit in the long run.
The wise medicine is to jettison the losers early and move to greener pastures.

Prudent investors skip the fancy bells and whistles.
Instead, they focus closely on where they are headed.

Nest eggs fare better by trimming needless investment risks.
Especially, those whose stocks and mutual funds exceed two thirds of total portfolio.

Let’s get to portfolio positioning for the second half 2016 and beyond.
I’ve already purchased the first tranche on sale.

No second guessing your well reasoned decisions please.

I welcome your contact.

Talk soon,

Adrian

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June 27th, 2016

Posted In: Adrian Mastracci Blog

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