Gutmann Core Equities: Balance Wins Out

Only 7 stocks are responsible for the price increase on the stock exchanges worldwide this year! This or similar are the excited headlines that draw our attention and  entice us to click. Rein in your desire, whatever follows is not worth your interest. 

Is anyone actually invested exclusively in these 7 stocks? Probably not. You don't have any of the 7? Then there's nothing to worry about. The majority of the articles want us to know that this narrow market rise is a warning sign and bad things are coming. 

Let's take a look at the Gutmann Equity Strategy portfolio. There you will find 4 stocks of this group: Alphabet (the Google parent), Apple, Microsoft and Nvidia. The last name is probably the biggest media star among the glorious 7. The promises of artificial intelligence catapulted the chip design company strongly upwards since the beginning of the year. 

You were just about to become a new client at Gutmann, but now you're hesitating. “I'm still supposed to invest there? What if it's just a bubble that's about to burst?” A fair question. Most star investors only come to the public's attention after their mutual funds or ETFs have staged a multi-year rally (remember Cathie Wood and Ark Invest?). At the peak, large sums of money flow into the financial vehicles before the crash comes. Then, at the end of the journey, the dollar or euro losses far exceed the gains made earlier. 

Managing concentration risks

At Gutmann portfolio management, protecting your assets and growing them are the top priorities. Exactly in this order. Whether you are a new client or want to increase your mandate, you don't have to worry. We also think about tomorrow and avoid concentration risks. Of course, even we cannot avoid the general fluctuations of the stock market.

70% of the Gutmann equity strategy is currently invested in the Gutmann Core Equities strategy. There we hold, among others, the 4 international stocks mentioned. Do we now have a huge Nvidia position after the recent rises? No. Our discipline of anticyclically cutting back winners and rebuilding losers several times a year prevents that. Nvidia is not a short-term hype stock in the Gutmann portfolio. We have been invested since April 2018. Admittedly, over the past few years, this investment has been a wild ride. The stock lost more than half its value in the difficult year of 2022 before more than tripling this year. [1] Our approach in retrospect: in 2022 we bought the stock at 3 times, while this year we sold it 3 times already. 

In 2023, the profit-maximizing method would have been to hold on to the position. But discipline is discipline and in the long run our approach is advantageous. 
 

[1] Past performance is not indicative of future returns.