Nine years of rising markets had investors riding a high all the way to the end of 2017.

Volatility did a great disappearing act which leaves us hoping investors haven’t forgotten that one of the few guarantees about investing is that the road to returns will be rocky.

China slows, oil prices drop (and recover), Brexit, Trump’s elected…all headline grabbers this year but largely noise to us. Don’t get us wrong, we’re all ears because we like to know what the industry is focusing on – though none of the above caused us to dramatically change course. That’s because our investment approach doesn’t change with the headlines.

From a macroeconomic perspective, the year ended very unlike it began. Volatility returned with a vengeance, the price of oil dropped like a stone and took the Canadian dollar with it while interest rates stayed put at near zero. 

Note: we mention these “events” because they weighed heavily on the minds of investors. But let’s face it, none of this stuff really matters when you know the value of the businesses you own…except for increased volatility, which we believe allowed us to build future wealth into our portfolios.

EdgePoint turns five!

To date, we’ve launched zero new funds, still don’t advertise and have no marketing department needlessly spending your money. Whereas our competitors are driven to create investment products based on the idea of “will it sell?”, instead we ask, “should we be selling it?” Most importantly, we’re halfway to our stated goal of achieving investment results at or near the top of our peer group over 10 years. So far, so good.

As they have for the past four-odd years, the competition tries to sell you products based on themes like safety, income and low volatility. They play into your anxieties about the market and investing.

We send a different message. We believe investors need companies that can grow no matter the economy and we try to buy them that growth for free.

One might give you what you want; we try to give you what you need.

Fear continues to dominate the market. We remain upbeat – for good reason. Every day we gain new investor and advisor partnerships, and strengthen existing relationships. Though short term with still a long way to go, relative and absolute performance of EdgePoint Portfolios is encouraging. We move out of our old office and into a new one.

Terms like “high unemployment,” “large deficits,” “increased volatility,” “market uncertainty” and “investor nervousness” aptly describe the investment backdrop. Music to our ears!

The world appears on the brink of collapse and capitalism is declared dead. Tye and Geoff call this period “the best opportunity of our investment careers.”

EdgePoint is born!

It also happens to be the dawn of the worst economic crisis in recent memory, dubbed the Second Great Depression. Purportedly stable companies like Lehman Brothers file for bankruptcy and a significant domino effect seizes financial systems. Major panic consumes the market. We ask investors for their trust.

It took close to a year to bring the idea of EdgePoint to life. We’d be lying if we said it was smooth sailing all the way.