Kevin Kirkwood doesn鈥檛 have a crystal ball, but he doesn鈥檛 seem too stressed about it. Over 30 years into his career, the Chief Investment Officer at has seen a lot of ups and downs in global economies and public investments, so when he talks about his firm鈥檚 projections for the months ahead, he鈥檚 notably calm.

That鈥檚 not to say that the coming months will be easy, it鈥檚 just that everything seems calmer when you take a long-term, big-picture perspective.

鈥淚 remember the first successful fund manager I saw back in 1992 鈥� he had the nicest suit I鈥檇 ever seen and had earned some incredibly impressive returns. But he was a one-trick pony, and a few years later the wheels fell off. Investing isn鈥檛 just about getting the highest return, it鈥檚 also about looking at the risk taken to achieve those returns,鈥� he says.

As lead manager for the , the firm鈥檚 largest and most diversified investment fund, Kirkwood meets with other members of the Alitis Investment Committee informally every week and formally once a quarter to discuss current investments and future trends. Here are some of the highlights of this quarter鈥檚 meeting:

• Interest rates and inflation are stabilizing: 鈥淗ave we peaked? Maybe, maybe not. But we鈥檙e closer to the top than to the bottom now 鈥� I don鈥檛 think it鈥檚 going to go as high as it did in the early 80s,鈥� Kirkwood says. We may not return to the extremely low pre-pandemic inflation rates, but rates similar to the early 2000s appear likely.
• Recession warning: A moderate recession in the near future appears likely, but not as severe as the 1980s or 2008 鈥� perhaps more like the early 2000s after the tech bubble burst. 鈥淭hat was a moderate recession in the USA that was bad for the stock market, but wasn鈥檛 as significant for average Americans,鈥� Kirkwood says. Canadians need to be prepared for a slowdown on this side of the border too.
• Real estate and mortgages continue to perform: The alternative investments at Alitis continue to perform well, despite rising interest rates and an unpredictable real estate market. Purchasing real estate at today鈥檚 interest rates is difficult, but for those with financing locked-in (like much of Alitis鈥� real estate exposure), now is a good time to invest. Also, as banks have started tightening their lending standards, nontraditional mortgages have brought in very good returns for Alitis.

• Fixed income improvements: After 2022, one of the worst years on record for bonds, fixed income now offers an attractive return with far less risk than a couple years ago. 鈥淩ecessions are generally good for bonds. Still, we are looking to shift towards quality debt securities with less credit risk.鈥�

• Stocks have higher risk: 鈥淭he stock market generally has higher risk as recession approach. Decent returns are still possible, but they come with higher risk,鈥� Kirkwood says.

• China and Japan: 鈥淭here are a lot of unknowns in China. The government has , which is concerning, and some property development firms are in financial difficulty. We don鈥檛 know the consequences of that yet or whether it will impact us, but it鈥檚 on our radar,鈥� Kirkwood says. Meanwhile, Japanese stocks are looking much more attractive to investors for the first time in decades due to their valuation and cheap currency.

When the market is uncertain, two things help minimize risk: diversified assets and time in the market. That鈥檚 why Alitis invests long-term and diversifies its investment funds, like the Alitis Income and Growth Pool ,with a mix of assets including fixed income, mortgages, real estate, and stocks.

Find Alitis Investment Counsel in Campbell River at , in the Comox Valley at ., in Victoria at , and online at . For more information, call 250-287-4933 or email info@alitis.ca.