Current Outlook

Updated November 8, 2023


The following strategies guide our advice to clients and are reflected in the positioning of the Founders Fund.

Like we’ve done in the Founders Fund, we suggest investors stick close to their long-term target of stocks and bonds. This might require some rebalancing given the recent rise in markets. Investors drawing from their portfolio, including those enrolled in the newly launched Steadyhand Retirement Withdrawal Program, should top up their spending reserve. We recommend investors have two years worth of expenses set aside in the reserve (please contact us if you’d like to learn more about the program).

Higher interest rates, and therefore higher borrowing costs, are impacting businesses in numerous ways. Most directly, large capital expenditures are slowing and expenses are being cut. Consumers are feeling the pinch too. Like businesses, they aren’t spending as much on things they want and are looking for cheaper alternatives to things they need. This slowdown is what policymakers were hoping for to tame inflation. Given this backdrop, balanced investors might be surprised to see positive returns in their portfolio this year.

Investors are now earning a decent yield on cash and bonds. For example, the Steadyhand Savings Fund is yielding 5.1% before fees (as of November 3, 2023). This is much welcomed by investors accustomed to earning almost nothing on the more conservative parts of their portfolio. Stocks have also risen as investors readjust their expectations to a future that might not be as bad as they once feared.

In the Founders Fund, we’re holding 33% in bonds, more than we have in past years and close to our target of 35%. We expect stock market returns to be in line with historical averages and have kept our equity weight close to our 60% target.


The risk versus return trade-off for bonds has improved but returns are likely to come with higher volatility than investors have been accustomed to as yields react to changes in inflation and central bank activity. Over the next five years, we expect bonds to return between 4-6% per year, which translates to a 20-30% cumulative return.

Bonds remain an important tool for most clients. They can provide safety when stocks are volatile, and as such, are a diversifier for a balanced portfolio.

In the Founders Fund, we’ve maintained our below-target weight in bonds (32%) but have increased the allocation with the rise in yields. We continue to hold an above-target weighting in cash (9%), which provides some defence when interest rates are rising and gives the fund liquidity. Much of the cash is invested in short-term investments such as T-Bills which are currently yielding over 5%.


Our outlook for 5-year stock market returns has increased to 7-9% per year (or 35-55% cumulative), which is in line with long-term equity returns. For context, we expected 4-6% at the beginning of 2022.

The Founders Fund has a 59% stock allocation, which is just below the fund's long-term target. We started 2023 at 65% but have rebalanced our weighting.

Specific Advice

If you would like an assessment of your portfolio or help with developing an investment strategy, we encourage you to book a meeting with us. We provide clear-cut advice and can help better align your investments to your personal situation.

Founders Fund Asset Mix: November 8, 2023