In this episode, balanced portfolio manager, Steven Visscher, covers 2024 performance, asset allocation decisions, trade uncertainty, potential tariffs, and AI-driven productivity growth. Above all, he emphasizes long-term discipline, diversification, and avoiding emotional investment decisions in an unpredictable market environment.
Key Takeaways:
- The balanced portfolio saw strong absolute returns in 2024, with all asset classes performing well. Despite early economic concerns, inflation eased without a recession. Relative performance lagged benchmarks, causing some disappointment.
- The portfolio maintained a neutral 60% equity target in 2024, trimming gains to manage risk. A key structural shift was introducing a 3% allocation to U.S. mid-caps, enhancing diversification and improving valuation metrics by targeting medium-sized companies with long-term growth potential.
- Tariffs and policy shifts are monitored but not pre-positioned for in asset allocation due to their unpredictability. Instead, adjustments occur at the security level, reallocating capital to businesses more resilient to potential trade impacts while managing risk within the portfolio.
- The impact of trade and tariffs on global growth, currency volatility, and policy responses, with heightened uncertainty in 2025.
- A potential productivity boom is emerging, driven by political shifts favoring deregulation and the broader integration of AI beyond tech giants into operational efficiency.
- In the face of uncertainty, staying diversified and committed to a long-term strategy is key. Avoid emotional decisions, resist short-term speculation, and trust in a disciplined approach that has proven effective over time despite market fluctuations. Keep perspective and stay the course.
Host: Andrew Johnson, CFA, Mawer Institutional Portfolio Manager
Guest: Steven Visscher, CFA, Mawer Portfolio Manager, Balanced
Founded in 1974, Mawer Investment Management Ltd. (pronounced "more") is a privately owned independent investment firm managing assets for institutional and individual investors. Mawer employs over 250 people in Canada, U.S., and Singapore.
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