We live in strange times! Following a strong rally between late March and early June, markets have hung tough over the last couple of months, at odds with a resurgence in COVID-19 cases and deaths (across Victoria and regions abroad). It is a tough time to invest. With markets enjoying vast amounts of global monetary and fiscal support, valuations remain somewhat full. Yet we may see further strength should a vaccine or other treatment be successfully developed over the near-term. However, should efforts for a cure prove unsuccessful or take considerably longer to be delivered, markets could come under pressure.
Heading into the August company reporting season we are positioning portfolios to benefit if the former occurs, while retaining a stringent focus on protection in case the latter occurs. In this uncertain environment we are taking a cautious approach, being tactically underweight growth investments. Our portfolios are holding high quality businesses whilst maintaining liquidity through strong cash positions. Should we be proven wrong and markets forge ahead, we remain comfortable missing out on some of the upside. We feel this typifies our long-held strategy of "protecting clients' capital".
As we review updated company information and management commentary we will continue to actively challenge our portfolios' composition, hoping to uncover some attractive long term investment opportunities.