Market Commentary

Putting cash to work
Stephen Jenkins, Senior Portfolio Manager
February 25, 2016

Why I have been putting cash to work in recent weeks and why, as a long-time value investor, it is the right approach to be taking.

After one of the lengthiest periods in market history without so much as a 10% correction, volatility re-emerged in mid-2015 and brought with it broad-based declines in stock prices. This market turmoil has continued into the beginning of 2016 and has left investors feeling nervous. While the current period of volatility remains below the heightened levels experienced during the 2008-09 period, there is a similar level of fear and pessimism permeating global markets. As long-time, bottom-up value investors, we axiomatically look toward periods of great dislocation and investor fear as being periods where long-term opportunities are created as fundamentals get tossed aside and investor emotions take over. This was certainly the case during 2008. The indiscriminate selling during the latter half of 2008 provided Harbour with tremendous opportunities, which we took advantage of with great conviction. We had drawn down our cash reserves during that period to the lowest levels in our history, ending that year essentially fully invested in stocks. The market slide continued until a definitive bottom occurred on March 9, 2009.

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