Our All-Weather Quality Portfolio
Now is the time to invest in our great low-risk compounders!
Markets move! That’s a good statement to start this weekly update. Intraday crashes on earnings, macroeconomic events: it all happens from time to time. Do we care about that volatility? Absolutely not, but it does inhibit many investors from staying the course and focusing on what matters most: fundamentals and making sure you’re invested in resilient businesses. The below graph highlights the severity of drawdowns on intra-year performance.
Companies that keep compounding their earnings regardless of the economic outlook: that’s what we’re looking for. And to be fair, that’s not an easy task these days: how do we know companies will survive the next recession or even better: will continue thriving? Don’t you just have to buy mainstream quality companies? It’s a question that’s been raised by many of our premium members.
Make no mistake: it’s much more nuanced than looking at ROIC and past performance (being not indicative of future returns, as the usual caveat goes). Let’s elaborate on what will make a quality portfolio truly resilient over the next years.
