- Global asset valuations are stretched on all measures
- Global recession fears have subsided
- There are some signs of stress in the operation of markets
- Expect higher volatility
- Maintain a high level of diversification across portfolios
The Most Diversified in Twenty Years
As Providence enters its 20th year of providing truly independent investment advice, we are reminded of tectonic shifts that can occur over time and the implications for portfolios. Our first Global Outlook and Strategy document in 2000 noted that “the AUD was bottoming at 50c, that we are at the top of the interest rate cycle, we had some concern regarding a credit a crunch and corporate defaults and we had cash weightings at historically high levels of 12% which we will soon be looking to deploy.”
Subsequently, the US market fell 14% from its high with the NASDAQ down 47% for the calendar year 2000. By December 2001 we were fully invested, had deployed the cash and rode the recovery..read more.