None of us could have anticipated a year quite like 2020. On March 13, on the All Ordinaries, we saw an 8.1% drop in the market. At the end of the day the market was 4.1% up. The volatility, fuelled by a global pandemic, presented a unique set of challenges, but we knew exactly what to do. This was a time when all hands were on deck and all the Elston skills and processes held true as we navigated choppy waters.
This year we witnessed the fastest peak to trough sell-off in market history from the February 20, 2020 peak at 7,230 points to March 22 at 4,564. At time of writing this article, the All Ordinaries is back up at 6,842 some 8 months later.
In this situation, timely investment management is vital. Portfolios can quickly move from the desired asset allocation weightings. A traditional model portfolio, not rebalancing regularly, can easily drift off course. There’s a real danger here. If your portfolio is out of balance, it won’t be positioned to take advantage of a recovery when it happens.
Within the Elston portfolios we were able to quickly deploy our overweight defensive assets into selective opportunities as they presented themselves. This is the beauty of managed accounts. Instead of waiting for individual client review dates, we could move proactively and at speed.
Moving decisively is vital. But just as important is communication. Especially when the normal way of interacting with advisers was so disrupted for so many clients. Face to face meetings were replaced with phone calls. People were turning to us for information and reassurance, eager to read emails and watch video updates. The Elston team boosted client communication immediately, making more phone calls, inviting clients into video chats (now the new norm) and passing on updates from the asset management team as soon as they came to hand.
So, has the eye of the storm passed now? It’s too early to say, but there are promising signs ahead. Despite the headwinds and shifting tides, Elston portfolios have stayed on course. And recent news around vaccine developments is providing a more confident outlook for the economy.
As always, we look beyond what’s happening in the short term and focus on long term opportunities. There will be a break in the clouds eventually, and while we’re waiting for that to happen, we will continue to steer our way through all this volatility.
If you would like more information please call 1300 ELSTON or contact us to speak to one of our advisers.