When the market’s chatter turns from “preserve my capital and let’s wait to invest until the smoke clears” to “wow look what’s hot right now”, and a media chorus of “buy the hot stock” is ringing, it’s tempting to let emotion dictate your next move. We occasionally hear similar sentiments from those we serve, and have also discussed internally whether diverse equity portfolios—such as dividend-based or low-debt, high-quality company focused strategies, like the Global Equity Strategy—may appear “a little behind the curve” in today’s “risk-on environment,” where valuations are becoming increasingly stretched. Some clients have floated the idea of pulling money out from these types of mandates to cover current cash‑flow needs, instead of selling their best performers, which we prefer as an ongoing process.

That reaction is understandable. Nobody wants to sit on a boat that seems to be drifting while everyone else is sailing ahead. But before you start rowing toward the nearest “high‑flyer,” let’s pause and walk through why the lag you’re seeing may actually be a sign that a strategy like Global Equity is still doing exactly what its objective dictates: buying quality businesses with little or no debt when the market under‑values them, and holding them until the price catches up.

The Lag Is Not a Failure – It’s a Feature

From a performance standpoint, the Global Equity Strategy has definitely lagged behind the high flying tech names that dominate major global indexes of late, and that gap has prompted the conversations we’ve been having. Yet, if you zoom out to the ten‑year horizon, the strategy has delivered as expected, compounding capital in high quality businesses. The short‑term lag is simply the natural ebb and flow of a strategy that deliberately avoids chasing the latest hype.

When a strategy’s methodology is rooted in fundamental company selection, periods of lagging are inevitable. The portfolio is purposefully weighted toward companies that are temporarily mispriced—not the ones that are already riding a wave of market euphoria. In those quieter moments, the strategy is actually building a margin of safety that later translates into upside when sentiment normalizes. And normalize it will.

Turning the Narrative Around

Imagine you’re watching a marathon runner who falls a few meters behind the pack early on. Most spectators would assume they should change their bets, yet seasoned runners know that pacing, conserving energy, and waiting for the right moment to surge can ultimately win the race.

Similarly, in the end, the quiet and undervalued corner of the market still holds a high probability of steady, compounding growth. By respecting both this long‑term fact, and by focusing on raising cash from your short-term winners, you can stay the course while keeping your financial plan flexible enough to adapt to life’s inevitable twists. The lag isn’t a warning—it’s a reminder that disciplined patience is often a better ride than a frantic chase to capitalize on the next headline.

Randy, Ian, and Harrison

 

Disclaimer: This report is provided for informational purposes only and does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such offer or solicitation would be prohibited.