We hope you are safe and well during these extraordinary times. Everyone here at Trinity Portfolio Advisors are safe and well and continue to come into the office to help all our clients make decisions they feel great about. This email is to inform you about some changes we are making in our equity allocation.
Today, we sold some of our equity holdings that have outperformed the rest of the market over the last few months. Specifically we are selling a portion of the Morgan Stanley Insight Fund ("CPODX”). This fund has returned 16.4%[i] so far in 2020. This is versus a loss of 15.48% for the large cap benchmark we measure this fund against. As you can see this kind of out-performance has led to the equity portion of your account growing to a position that is out of balance with our intended allocation. Therefore, we are selling a portion of CPODX sufficient to bring the equity allocation back to our target.
As you know, our current equity allocation is about 65% of being fully invested. We sold 35% of our equities several weeks ago as the economic effects of the pandemic began to be seen and felt. The depths of the economic impact are still not fully known and we believe that until there is either a vaccine or an effective treatment, the economy will continue to suffer. Even though parts of the nation are beginning to reopen it appears that consumer confidence will not be fully restored until there is a vaccine or effective treatment. Therefore we felt it was important to get the equity allocation back down to 65% after it had grown significantly past 65%, largely as a result of the out-performance of CPODX. This will provide even more cash with, which to invest at an appropriate time.
We are also looking at our bond allocation currently, but we are not ready to make any changes. However, those changes may be coming and we will certainly make you aware of those changes when and if they are made.
If there is any way we can help you, please do not hesitate to contact us. Stay Safe!
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[i] https://finance.yahoo.com/quote/CPODX/performance?p=CPODX