In the past year, which saw a predominately bull market, SIMM’s performance has been exceptional. From January to the end of August, SIMM has gained nearly a 4 percent return heading into the school year. On a yearly basis, we returned over 11 percent from August 2017 to August 2018. Although we underperformed the S&P 500 in the calendar year, SIMM has a lower beta than the market, meaning that our investments don’t have as much market risk.
After the positive summer for markets, we have begun looking toward re-allocating capital in defensive sectors. The recent market sell-off, which sent the market down more than 3 percent, changed our investment focus from growth to value. Although, experts predict a recession within the next 12 to 18 months, we believe it is best for SIMM to prepare our allocations accordingly and slowly unwind positions that we feel are most susceptible to a market downturn.
By allocating more toward defensive sectors such as consumer staples, utilities and fixed income, we believe that our portfolio will outperform high beta sectors if the market were to dip. These defensive sectors often do not move in tandem with the market and instead move less or in the opposite direction of the market.
Our team has also discussed increasing our hedging positions with options or investing in gold. In no way is our team panicking about the markets, but instead we are looking to be proactive and prepare in event of a downturn.
We will also be going to New York City in early November on our annual networking trip. Every fall, around 15 students from the club go down to New York to network and tour firms with alumni. We see around seven offices, including companies such as Bank of America, Royal Bank of Canada, UBS, Bloomberg and Barclays.
Usually, we can also tour the New York Stock Exchange if there isn’t an IPO (initial public offering) that day. The trip allows students to learn more about the firms we visit and apply for jobs or internships there. Also, our alumni social is a great way for our members to speak with graduates to build their networks.
By Adam Talmadge, Contributing Writer
talmadaj14@bonaventure.edu
