Over the past week, I had the privilege of attending conferences from both Fidelity Investments & Renaissance Investments in order to gather some insight on market direction from three of their top portfolio managers. I was lucky enough to listen to Steve MacMillan (manager of the Fidelity Small Cap America fund), Dan Dupont (Equity Manager of the Fidelity Monthly Income fund) and Ignacio Sosa (bond manager at Doubleline Funds in partnership with Renaissance Investments). Here are a few of the key takeaways from both events:
– A low interest rate environment is becoming increasingly more difficult to manage, especially for bond managers.
– Canadian household debt is a big concern, especially if there is to be a downturn on the housing market. Canadian household debt is the largest out of all G7 nations.
– Buying companies that are proven, dividend payers is the key to a sustainable growth model while keeping volatility low.
– The decision to sell a stock is as economically significant as the decision to buy.
– Have a “bottom-up” approach. Ensure companies are generating enough in retained earnings so that they are able to afford dividend payouts.
– Do not place all your focus on capturing all the upside in stock market rallies. Instead, focus on reducing the downside capture and protecting yourself during market reversals.
– Always keep your time horizon in mind when investing. Let your time horizon dictate how much risk you are willing to accept.