Fenestra Out Performs Again!
Fenestra’s view on the market turned decidedly bearish (an opinion that share prices had for the moment reached their highs and that going forward they would decline in value substantially) in November last year.
This view turned out to be exactly correct and coincided with the bull market high. A bull market is a market in which prices are rising.
Since then, Fenestra has worked hard to increase our cash holdings, particularly US dollars, which has been the best performing asset class since the end of the bull market.
Selective stocks have been sold, dividends collected and interest earned. This places Fenestra and our clients in a very strong position for the future bull market.
In the meantime, we research and study the market and many stocks every day. We want to find the: “next big thing”. We also add to our body of knowledge and update our files on all our most favourite stocks.
Fenestra’s correct prediction of increased market volatility and increased risks continues.
We will concentrate our resources in cash and cash like assets with short duration (Duration is just a fancy pants term for the length of time to expiry of the investment). The longer the duration, the greater the risk of the investment.
So, adding a cash element to a portfolio allows an investor to decrease portfolio risk and secure an additional and highly predictable future income stream in the form of regular interest payments. Predictability and security become very attractive attributes in a bear market.
This sounds counter intuitive but there is always a bull market and the bull market now is in cash and cash like investments. The highest returns will accrue to the most scarce resources and in a bear market and recession the most scarce resource is cash. Cash management is now vital.
This way we protect capital while other managers are fighting mounting losses and struggling to survive.
And here is the most important point. Sitting on cash and investing in growth stocks are not mutually exclusive. It is very hard to find the right balance but cash is the most vital and fundamental aspect of modern portfolio management.
This places Fenestra and our clients in a very strong position for the future bull market. Fenestra will remain prudent and very carefully allocate capital to excellent opportunities. We are mindful of the very challenging macro-economic environment but with our industry positioning and our diversified investment allocations we will be able to execute strategy in any environment.
Again, in the meantime our cash holdings constitute a most valuable component of our portfolios. This is the “gun powder” we need to make a strategic selection of new stock market winners. Make no mistake. Fenestra is ready.
If you are not happy with your portfolio performance or would like a second opinion,
please do not hesitate to contact Fenestra on 021 689 7855 for a free review of your portfolio.