Long Term Thinking in a Volatile World
Many market indices are hitting all-time highs and our portfolios have certainly benefited. Amidst this environment, it is more important than ever to focus on resilience, durability, risk management, and long-term thinking.
It’s an understatement to say that it’s been a volatile and news-filled year. In today’s volatile macroeconomic and geopolitical landscape, investors face a whirlwind of market fluctuations driven by inflation concerns, shifting interest rates, and unpredictable geopolitical tensions. Tariffs or policy changes can hurt or flatter earnings in any given quarter. To the extent we make the right call on how tariffs or a policy change impacts a company, the policy environment has been unusually volatile with policy seemingly changing monthly and in some cases weekly. Healthcare investors saw this firsthand when Dr. Vinay Prasad, the FDA’s Vaccine Chief, was fired by the White House in July 2025 (with investors seeing this as a sign of more relaxed regulations) but then re-hired less than two weeks later.
While these factors can create short-term uncertainty, it’s essential to remember that successful investing is rooted in a long-term perspective. Wealth is not created over a single quarter or even a single presidential term, but rather, gradually built over much longer time periods. This is why the North American Core portfolio evaluates risks over a long-term horizon. We are laser-focused on companies that are durable and resilient and can grow and create value in all types of scenarios. In many cases, these businesses offer mission critical services like hedging risks (CME), brokering insurance (Marsh & McLennan), or conducting lab tests (Thermo Fisher Scientific); services that are required irrespective of geopolitics or the economy. In some cases, they benefit from a volatile environment.
By focusing on high quality businesses, paying attention to valuations, and sticking to well-researched and diversified portfolios, we are confident that our portfolio companies can weather temporary setbacks while positioning themselves for sustainable growth over the long-term.
“This means that” in a world where geopolitical and macroeconomic risks are part of the landscape, it is more important than ever to remain committed to a strategy that aligns with long-term objectives, rather than over-reacting to short-term noise.
National Instrument 31-103 requires registered firms to disclose information that a reasonable investor would expect to know, including any material conflicts with the firm or its representatives. Doug Johnson and/or Pathfinder Asset Management Limited are an insider of companies periodically mentioned in this report. Please visit www.paml.ca for full disclosures.
Changes in Leverage. We are increasing the asset ceiling to 2.0 times the market value of equity for Pathfinder International Fund and Pathfinder Conviction Fund to be consistent with Pathfinder Partners’ Fund and Pathfinder Resource Fund.
For more information, please follow the links above to review the fund term sheets.
*All returns are time weighted and net of investment management fees. Returns from the Pathfinder Partners’ Fund and Partners’ Real Return Plus Fund are presented based on the masters series of each fund. The Pathfinder Core: Equity Portfolio and The Pathfinder Core: High Income Portfolio are live accounts. These are actual accounts owned by the Pathfinder Chairman (Equity) and client (High Income) which contain no legacy positions, cash flows or other Pathfinder investment mandates or products. Monthly inception dates for each fund and portfolio are as follows: Pathfinder Core: Equity Portfolio (January 2011), Pathfinder Core: High Income Portfolio (October 2012) Partners’ Fund (April 2011), Partners’ Real Return Plus Fund (April, 2013), and Partners’ Core Plus Fund (November 2014).
Pathfinder Asset Management Limited (PAML) and its affiliates may collectively beneficially own in excess of 10% of one or more classes of the issued and outstanding equity securities mentioned in this newsletter. This publication is intended only to convey information. It is not to be construed as an investment guide or as an offer or solicitation of an offer to buy or sell any of the securities mentioned in it. The author has taken all usual and reasonable precautions to determine that the information contained in this publication has been obtained from sources believed to be reliable and that the procedures used to summarize and analyze such information are based on approved practices and principles in the investment industry. However, the market forces underlying investment value are subject to sudden and dramatic changes and data availability varies from one moment to the next. Consequently, neither the author nor PAML can make any warranty as to the accuracy or completeness of information, analysis or views contained in this publication or their usefulness or suitability in any particular circumstance. You should not undertake any investment or portfolio assessment or other transaction on the basis of this publication, but should first consult your portfolio manager, who can assess all relevant particulars of any proposed investment or transaction. PAML and the author accept no liability of any kind whatsoever or any damages or losses incurred by you as a result of reliance upon or use of this publication.