Global stock markets have so far this year been marked by war and increased geopolitical uncertainty. Most global equity markets have fallen between 3% and 8%, and for Norwegian investors, the situation has been compounded by both the dollar and the euro weakening against the NOK. Measured in Norwegian kroner, the global index is down about 8%, while several major global funds have fallen by as much as 15%.
It is in times like these that we see the true value of our investment strategy.
Our portfolios have delivered returns ranging from +1% to -3% over the same period, depending on risk level. This is significantly better than the broader market and most of our competitors. The results confirm that good diversification, strategic allocation, and systematic rebalancing pay off—especially when the storm hits.
The Right Risk
They say it’s hard to predict, especially the future. In hindsight, most things are easy to explain, but the art lies in finding the right risk balance before the turbulence begins. The most important question an investor must ask themselves is: How much volatility can I tolerate before I lose sleep at night?
Volatility is the price you pay for expected returns above bank interest rates. The most common mistake many make is holding too much risk when the market rises, only to panic-sell at the bottom.
Follow the Oil Fund’s Lead
We help you find a risk profile that matches your time horizon and goals. Research shows that 90% of long-term returns come from the strategic composition of the portfolio (allocation), not from short-term bets (tactics).
We stick to the plan. By combining a solid Norwegian allocation with a smart index strategy, we’ve shielded our clients from the biggest drops while still participating in the upside over time. This also allows us to rebalance effectively: We sell what has become expensive and buy more of what has become cheap.
The Norwegian Oil Fund has published several articles on this topic, concluding that rebalancing delivers significantly better risk-adjusted returns over time.
Markets will continue to fluctuate, and no one can predict the next turn. But with the right profile and a steady strategy, we use these fluctuations to your advantage—to create the best possible risk-adjusted returns over time.
Are You Positioned for the Road Ahead?
Market fluctuations are inevitable, but your sleep doesn’t have to be affected. We help you build a robust portfolio that can weather the storm and seize the opportunities that arise. Contact us for a no-obligation review of your strategy. We’ll ensure you have the right risk level for your goals.
Happy Easter!
Rgds, Jon Nerseth
