Rather than waiting for the quarterly investor letter, which will be out in the next week or so, we felt it was important to give you an update on market moves and our current views.

There are times where markets go through periods of unprecedented change but today, we live in a world where markets are overly influenced by the US president.

We all know by now the reaction of the world to the “reciprocal” tariffs that Trump announced this week. Although the basis for the calculations appears to be focused on trade imbalances with the rest of the world, the message was loud and clear: Trump wants America to be back in the manufacturing business. In effect he just pulled off a “Brexit” with the rest of the world, ripping apart the trade framework with almost every country. The markets reacted with strong negative sentiment with fears of a recession and even stagflation arising. Investors voted with their feet and there has been broad-based selling across nearly all markets. There have been very few positive assets across markets as global fear has increased.

Your Portfolios

First of all, the good news is that all of our asset class portfolios finished Q1 in positive territory (more to come on that in the Q1 letter). Our approach of complementing traditional markets with alternative investments allows us to smooth the path for you and your families. That’s the goal for us. The use of alternatives enables us to add explicit diversification while widening the opportunity set.

Markets have a way of forcing humility onto investors. Our portfolios will experience volatility, but we are in a position of relative strength. Roger Federer won an astonishing 81% of his career matches but did so by winning only 55% of the points. In investing terms, we are trying to win a small majority of the time to excel over multiple generations for our client base. A multi-generational focus on wealth management allows for slowing down the thought process and not getting caught up on the noise.

Your portfolios are built with diversification in mind. Diversification isn’t about owning as many assets as possible, it’s about owning assets with different fundamental drivers to their returns. The drivers of the price of public and private markets are very different. Private assets are valued on a less frequent basis, removing the need for their management to be reactive to public market variations. It’s a smoother path and a stronger signal.

There will be opportunities here amongst the noise and we will work hard to identify those. Buying on the way down is uncomfortable but to quote Walter Deemer: “When the time comes to buy, you won’t want to”.

Our Approach

So how do we focus and make sure you have the best portfolios possible?

1. Don’t panic – it’s better to be a buyer on your terms than a forced seller. There will be people that are overextended that need to sell
2. Look for opportunities – use a zero-based budgeting approach. Start not with what you own but focus on what you want to own
3. Re-underwrite investment theses – is any thesis broken?
4. Identify new themes – where are we going? What has structurally changed?

The uncertainty can be stressful and disconcerting, but our team is working hard to minimize risk and maximize opportunities for you. We are here for you, so please reach out to your relationship manager with any questions, comments or concerns.

Thanks,

Harv