During volatile times, it's only natural to want to react to wild swings in the stock market, but please try to remember the importance of staying invested and having a plan.
The best thing we can do for you is to make sure that your investment strategy is aligned with your specific financial goals. This means that you shouldn't expect to see trading activity on a daily basis because we do not try to time the markets. Rather, we take a disciplined approach to managing risk over time and actively rebalance portfolios on an ongoing basis. Specifically, over the last couple of years as the U.S. cycle has matured, we've been focused on reducing risk in client accounts and have embraced broad diversification. We've also been actively rebalancing your accounts, including when the market declines, to help you avoid taking on too much or too little risk.
Today, among other things, we are looking at bonds. Many of you own a fund called the DoubleLine Total Return Bond Fund, which has done well for us since we bought it. Now that our economy appears to be slowing down, however, we have decided to sell it. The fund owns a number of mortgage-backed securities which we feel could very well underperform as the economy slows and people have trouble making their mortgage payments.
For now, we plan to leave those funds in cash/cash equivalents as we look for opportunities to strategically move back into the stock market to, again, rebalance portfolios in a systematic way. We will keep you apprised.
We understand that you have choices when it comes to financial services providers and we are grateful that you have chosen Old Dominion Capital Management. Here’s hoping that, together, we can stay safe, healthy and calm!