Update from Pioneer Wealth Management
Like you, we are devastated by recent events and are sharing in the national sorrow and anguish as staff, loved ones, and friends are directly affected. We hope you are finding strength in the incredible positive initiatives being done so willingly by so many to help soldiers and victims.
At Pioneer, despite many staff and family members being called up, it is important for us to reiterate that we remain fully functional. We continue to vigilantly monitor the markets and developments and are managing your portfolios with the highest levels of professional care.
Managing money is never easy, but a few rules have stood the test of time and crises. One of these rules is that you should never make major changes to your portfolio and investment strategy during a crisis. As Warren Buffet famously said – the stock market is a mechanism to transfer wealth from the impatient to the patient.
Below is a short summary of markets for your information.
Since the war started, the Tel Aviv 125 is down only 2% bringing the year-to-date number to minus ~5%. We believe this is an insignificant move. The market has yet to draw any major conclusions. The latest Israeli CPI (Consumer Price Index) data showed a monthly decrease of 0.10%, contrary to the expectation of a slight increase. The market for government bonds surprised slightly with a sudden and earlier than expected rate reduction. The big news in the local market is undoubtedly the Shekel breaking 4:1 to the US Dollar, which is a rate that we haven’t seen since June 2009. We believe this is an opportunity to move money from USD to Shekel. Our Shekel-based portfolios are doing very well this year, as most of the equity exposure is non-Israeli.
Global markets are not pricing in a regional war and are have risen since the war began, with returns being positive year to date. US inflation appears sticky, and we expect another Fed rate increase of 0.25% in November.
Our Global portfolios are also performing relatively well compared to benchmarks. We maintain our overweight to USA markets and short duration for bonds. We believe there is a buying opportunity now in quality Investment grade bonds with maturities of 4 to 6 years.
Alternative portfolios have shown positive returns since the beginning of the year. As communicated in our webinars and previous correspondence, the alternative space is now facing a challenge as it takes time to adjust to the sudden return to average/high- interest rates. We find it helpful to think of alternatives as a large ship; it takes time to turn and change strategy due to the liquidity restriction of the underlying assets.
You will receive your regular quarterly report towards the end of October.
We pray for the safe return of all our security forces, civilians, missing and kidnapped and for the speedy recovery of all injureded. We send our deepest condolences to those who have lost loved ones.
Pioneer Management and your personal Wealth Manager, are available at any time to answer any questions you may have.
Hoping for good news and calmer times for all.
Am Yisrael Chai!
The Pioneer Family.