Just like at home, life is very different at the office these days. We remain fully functional, and we’re all grateful that we have relative stability in our jobs and the ability to work from home without undue disruption. It helps that our IT guy Craig is an absolute rock star and was able to securely set up a work-from-home solution in just a day or two.
Business as Usual
Financial organizations are on the list of businesses deemed essential in New York, so Chris and I continue to “hold down the fort”. Yet, things are quite different. We can’t go out to lunch any more. We don’t have any meetings or appointments. And, no one really comes to the office. That means certain niceties have been suspended. Haircuts are no longer an option, neither of us has shaved in quite a long time, and business attire has given way to whatever pair of jeans is closest to the bed in the morning. We look more like investment hobos than investment professionals, but we continue to trade and manage portfolios. Given the vagaries of the stock market of late, the profanity in the largely vacant office may have escalated a bit as well.
Despite the new era, some things have not changed. You are still able to get in contact with any of us at any time. You can email us or call us on our cell phones. Operations are generally “business as usual”. We have even continued our growth through this period and have added one new team member and have another waiting in the wings for after we return to normal office life.
Nick Russo, CFA has rejoined our team. He worked here a couple years ago, and then spent a couple years at the University of Rochester in the endowment office, helping to manage the $2.5 billion investment portfolio. Nick is back working in an investment capacity with us, managing portfolios and executing trades. His first week back was just as the stock market was taking the worst of its dive, but Nick was able to jump right in and help us keep portfolios on track.
New Stock Approach
Speaking of portfolios, we have made a few changes lately that happened much faster than we anticipated. We have been researching an extension of our factor-based investment approach for the past year or so. We decided there were some changes we would like to make but realized that because of embedded capital gains in most of our clients’ portfolios, we would not be able to make much progress. However, with the stock market dropping recently, we were able to realize tax losses, do some rebalancing, and also largely implement our new approach.
So, you may see some new securities in your accounts. In some cases, we sold just about everything we held previously and replaced it with new investments. While this seems extreme, the changes we have implemented are more of an evolution than a revolution.
When we started the business, we tried to capture the “value” and “momentum” factors, and then a year or so ago we added a fund for “low volatility” stocks. We’re now adding a “quality” factor fund and expanding the small-cap and international parts of the portfolio to include factor funds. Our research, as well as that of noted academics, suggest that this should further diversify our portfolios and increase the odds of long-term solid returns. Despite all the recent trading, these really are fairly subtle changes that are a natural extension of our long-standing strategy.
The wild market and the updated portfolio strategy have kept us pretty busy of late. So, if you haven’t heard from us, and have questions about anything we’re doing, please feel free to reach out. Despite all the recent trading, these really are fairly subtle changes that are a natural extension of our long-standing strategy.
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