So far, the financial market reaction has been muted, although the first few days of March have been of the gloomy kind. No wonder our clients want to know what we do, how we see this kind of market, and how we prepare for further surprises.
It is tempting to paraphrase the Serenity Prayer, whose first lines form a brilliant piece of advice whatever your religious beliefs or affiliation.
The first part goes like this:
God, give me grace to accept with serenity the things that cannot be changed,
The Greek philosopher Epictetus would certainly concur. If you can’t do anything about it, why bother? In asset management terms, there’s a host of events that don’t really affect performance in the long run. If they don’t, there’s little point wasting energy thinking about them. The stocks that will deliver the best performance in the coming decade are most likely the same as they were a month or two ago. At the very least, they didn’t change with last week’s headlines.
If you’ve spent years in the finance industry, raise your hand if you’ve never seen asset managers staggering from one trend to another. And remember: If you manage a long equity fund, that fund is by definition long the stock market. That’s one thing you cannot change (not sure it would be better if you could, though).
The next bit goes like this:
Courage to change the things which should be changed,
This is where we invest the most effort, day in and day out. There’s a lot that asset managers can do and they should never be apprehensive about making decisions and putting them into practice. For us, that entails constantly searching for well-run, solid companies with robust business models and being confident that they remain so, by diligent financial forensics and constantly updating our knowledge. Potentially, portfolios should be changed (or at least questioned) every day, although frequent changes may not be beneficial to your financial health.
Here's the part that requires a bit of reflection:
and the Wisdom to distinguish the one from the other.
We may be wrong, but it seems the previous part, that of changing things that can be changed, has precious little to do with the incumbent president of the US or other countries. You’re sure to find asset managers who disagree, but I wouldn’t bet on them having better risk-adjusted returns.
After all, our portfolio companies are all exposed to the same, constantly changing world. If they need to do something about it, I’m sure they are better placed to find a solution that works for them. In a sense, we have delegated this task to them, just as we have delegated the task of running democracies to politicians we elect.
I have a very clear suspicion that our portfolio companies are doing the better job.
Finn Øystein Bergh
Chief Economist & Strategist
Fund updates
Pareto Aksje Norge
- Pareto Aksje Norge A
- Pareto Aksje Norge B
- Pareto Aksje Norge C
- Pareto Aksje Norge D
- Pareto Aksje Norge I
Pareto Nordic Equity
Pareto Global
Pareto Nordic Corporate Bond
Pareto Nordic Cross Credit
- Pareto Nordic Cross Credit R (NOK)
- Pareto Nordic Cross Credit A (NOK)
- Pareto Nordic Cross Credit H (NOK)
- Pareto Nordic Cross Credit H-I (NOK)
- Pareto Nordic Cross Credit I (NOK)
Pareto ESG Global Corporate Bond
Pareto Obligasjon
Historical returns are no guarantee for future returns. Future returns will depend, inter alia, on, market developments, the portfolio manager’s skill, the fund’s risk profile, as well as fees for subscription, management and redemption. Returns may become negative as a result of negative price developments. This is marketing communication.