Over the last year we have been rebalancing portfolios to overweight high quality companies. This has included increasing or establishing positions in businesses with wide moats, clean balance sheets, high return on equity, and consistent earnings. These businesses tend to hold up better in down markets and compound steadily over time.

The focus on quality also provides a good counterbalance to more cyclical or aggressive parts of a diversified portfolio. In a low-interest-rate, low-growth world, we believe quality is not just defensive — it’s smart offense.

We believe investors will increasingly favor companies with durable advantages and strong fundamentals, especially when market volatility returns. We’re not chasing the next hot sector — we’re owning great businesses, patiently and purposefully.

If you have questions about what’s in your portfolio, or would like a copy of our most recent positioning summary, just let us know!

Sincerely,

Katz Family Financial