Friends,
After reading more information and analysis about the coronavirus outbreak (Covid-19), today we made the move to reduce the stock holdings in all of our diversified mutual fund portfolios by 15%.
What that means is that our already conservative-leaning portfolios are even more conservative. For example, our balanced portfolio, normally 50-60% stock is now 35% stock. Most of the adjustment comes from international (developed and emerging markets) stocks with select reductions in domestic stocks.
Our goal in making this tactical adjustment is to preserve our 2019 portfolio gains as much as possible. As you know, we believe in being invested for the long-term, so we try to make tactical adjustments only when absolutely necessary. Based on what we’re seeing – it is necessary now.
We’ll continue to monitor the situation and all of our portfolios for any additional adjustments that may need to be made. The downside of making this change is that we may lose some performance when the markets turn back up. The upside is that we will be cushioning what may be an extended decline. I believe that the tradeoff is most definitely worth it.
Remember that if you own our Green Sage Sustainability Portfolio, that is always 100% stocks. Most of our clients in this portfolio understand the volatility that comes with this. However, if you own Green Sage and would like to move to a more conservative stance, please let your financial advisor know.
Finally, make sure to stay on top of this outbreak. It might not be a bad time to maintain extra food and water supplies should it happen to spread rapidly in the US. Ultimately, everything will be okay, but it’s the short-term that is concerning. Please take care of yourselves!
Should it become necessary, the Earth Equity team is prepared to work remotely if we are unable to work from our office in downtown Asheville. Hopefully this won’t be the case, but just in case…
As always, thank you for your friendship, business and introductions. We are grateful for you!
My Best,
Peter Krull, CSRIC™
CEO & Director of Investments
Earth Equity Advisors, LLC
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