Growth at a reasonable price GARP that's what guides me. I love growth, who doesn't? If you love growth then you have to love what the US Equity Market has done for your portfolio. In particular the earnings growth in the US stands out about four and a half times as much as Europe, and nearly triple Canada in 2024.
Given the earnings performance we saw a stark difference in the performance of US and Canadian equities over international equities let alone bonds and cash in 2024. GARP investors are concerned with what they must pay to get the growth that they expect, and looking out to 2025 Equity markets are expecting another year of superior results for the US.
Given that, the valuations in the US are quite high they're well above their long run averages. This level of valuation would need to be justified by not just superior earnings growth in 2025, but multiple years to come, and history would suggest that that path isn't always as straight of a line.
All of this to say, have you rebalanced your portfolio? This level of performance means allocations regionally are much different from where they started the year or where your targets might be. Rebalancing a portfolio is about risk management to ensure proper diversification across the portfolio.
In the fourth quarter we added to our international position, we took profits in the US, and added to certain us positions that we believe have an attractive balance between growth and valuation. Matco is a conservative firm we strive to balance risk and return through our growth in a reasonable price investment process.
In the fourth quarter the Matco Global Equity Fund series O returned 2.32%, and for the period ending December 2024, we returned 16.95% in the last 5 years and annualized 10.58%.
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