Here we are at mid-year, looking around the world trying to assess what the investment horizon might look like in another six months. At this juncture, we would like to share with you feedback we have received from our clients and prospects globally. They are increasingly interested in absolute returns, rather than performance relative to a benchmark. Although comparisons with indices still matter,
our philosophy has always been preservation of
capital, particularly during volatile markets.
In the last six months, stories about Greece, a stronger US dollar, and the Fed’s first interest rate hike have dominated headlines. But often times the topics which are popular to focus on today, are not what matter in the longer run.
You have heard us frequently talk about the importance of taking a global approach to investing, as all assets are affected by changing world conditions. Along those lines, an interesting fact is that world GDP is now over $110 trillion, with nearly 85 percent of total output coming from outside of the US. This is a dramatic change from 10 or 15 years ago.
What is the most important thing you should focus on? Consistent with our clients’ shift in focus to absolute returns, we will continue to provide stability of principal, diversification and liquidity. The ability for an organization to provide this depends a lot on its culture. For the past 32 years that we have been in business, we have had the same governance and ownership structure. Our culture is based on a team approach with our focus on finding solutions, not selling products.
In closing, we believe there are many favorable factors in the world today, even though there are many challenging geopolitical situations. What will dominate the headlines in the second half of the year will invariably be different from what grabbed attention in the first half of the year.
We will continue to be in close touch with you. My very best wishes to you and your family for the summer.