Title Image

QUARTERLY INSIGHTS

Each quarter, we share observations about the market and insights on a specific topic.

  • All
  • Insights
  • Market Commentary
December, 2023
4th Quarter

Committing to a Long-Term Strategy in the New Year

The beginning of a new year is marked by many attempts to forecast market behavior and influences. However, an investment strategy that relies on correctly forecasting short-term behavior is extremely unlikely to endure. Fortunately, if one can lengthen the time horizon of their investments and build a portfolio of great companies with sustainable earnings power, history has shown that the potential outcomes are predictably tilted toward success. At Riverbridge, this long-term strategy remains our commitment as we enter the new year.

December, 2023
4th Quarter

The Importance of Earnings Power Amidst Changing Market Expectations

2023 proved that attempting to forecast the markets is a futile exercise. Despite predictions of a recession, 2023 closed with healthy returns. In addition, the concept of Artificial Intelligence (AI) emerged as a paradigm-shifting force in the economy. As we enter 2024, investors have high expectations. Whether or not these expectations are met, we remain confident that Riverbridge portfolio companies are well positioned to continue to build their earnings power in 2024.

September, 2023
3rd Quarter

How Being Generalists Leads to Stronger Portfolios

As a group of generalists, the Riverbridge investment team embraces an unconstrained perspective when choosing companies to add to our clients’ portfolios. Paired with our champion/devil’s advocate decision-making approach, which prevents groupthink and rigorously examines all potential portfolio companies, this mindset of openness enables Riverbridge to think beyond singular factors, recognize context, and focus more fully on identifying companies positioned for long-term earnings power.

September, 2023
3rd Quarter

Strong Portfolio Companies in the Face of Economic Challenges

As per its earned reputation, the third quarter of 2023 posed challenges to investors. As the Fed maintains high interest rates and disruptive remnants of inflation continue to linger, the market is facing a difficult road into the new year. However, Riverbridge portfolio companies—marked by internal financing and mission-critical products and services—remain well positioned to confront current and emerging challenges.

June, 2023
2nd Quarter

How the Riverbridge Investment Culture Leads to Client Success

At Riverbridge, every investment is made to serve our clients—and the culture of our investment team is designed with that commitment in mind. Through compensation based on the overall results of the firm, a decision-making structure that avoids internal politics and confirmation bias, and behavioral expectations grounded in transparency and listening, we cultivate an environment conducive to long-term client success.

June, 2023
2nd Quarter

A Long-term Perspective on Market Improvements

The first half of 2023 exceeded low investor expectations. Equity markets surged, excitement for possibilities surrounding AI grew, and the Fed’s goal of orchestrating a soft economic landing showed signs of promise. We welcome these outcomes, but we also recognize that they serve as a reminder of the perils of attempting to time the market. Above all, this quarter reinforced our commitment to investing in fundamentally sound companies with the ability to adapt to changing market conditions.

March, 2023
1st Quarter

Artificial Intelligence’s Potential to Create Human Opportunity

Due to the prevalence of ChatGPT, the first quarter of 2023 brought artificial intelligence to the forefront of our collective consciousness. Although we agree that some worries and hesitations around the rapid adoption of AI are valid, we believe the continued evolution of AI presents great opportunity to enhance human creativity and productivity—which, in the case of Riverbridge portfolio companies, is likely to drive sustainable earnings power.

March, 2023
1st Quarter

Equity Market Bounces Back Despite Continued Uncertainty

Throughout the first quarter of 2023 the equity markets proved resilient, posting strong gains as investors became more discerning of fundamentals. Despite the ongoing uncertainty surrounding the Federal Reserve and other macro factors, we remain confident in Riverbridge portfolio companies and their fundamental commitment to financing their growth from within.

December, 2022
4th Quarter

Approaching Valuation Through a Long-Term Lens

After the historic year that was 2022, questions of valuation have become commonplace. At Riverbridge, we believe these questions are unanswerable without the benefit of hindsight, so we approach them through a long-term lens, focusing on a given company’s fundamentals. This enables us to invest in solid companies that are well positioned to outperform over the course of a full market cycle.

December, 2022
4th Quarter

Looking Ahead with Confidence After a Challenging Year

The fourth quarter closed out a particularly challenging year for investors. Looking ahead to 2023, we predict market performance will likely be dictated mainly by inflation and the Federal Reserve. Due to their focus on internally financed companies, Riverbridge portfolios are well positioned to thrive amidst these factors.

September, 2022
3rd Quarter

How Enduring Companies Build Earnings Power in Challenging Environments

Even if the market experiences an earnings recession in aggregate, some companies won’t experience an earnings decline. What are the characteristics of businesses that can build earnings power in a difficult economic environment?

September, 2022
3rd Quarter

Navigating a Challenging Period with a Long-Term Perspective

The third quarter was a challenging period of the year for investors, marked by high inflation and efforts by the Federal Reserve to combat it. Despite these factors, Riverbridge portfolios contain many fundamentally vibrant businesses that we expect to adapt or even thrive in this uncertain operating environment.

June, 2022
2nd Quarter

50 Years Later: Lessons from the Nifty Fifty

Today’s market and economic environment shares many similarities to the 1960s and ’70s when the “Nifty Fifty” reigned supreme, then sold off precipitously. What transpired after the crash of the Nifty Fifty, however, provides some valuable reminders for long-term investors in 2022.

June, 2022
2nd Quarter

Maintaining a long-term focus in less certain times

The first half of 2022 saw accelerating inflation and rising interest rates, resulting in equity markets experiencing their worst first half since 1970. While it is futile to attempt to predict when the market will bottom, Riverbridge is confident that our companies will continue to build their earnings power by leveraging their strategic market positions.

March, 2022
1st Quarter

What’s Old is New…Again.

Automation, digital transformation, cloud computing, eCommerce, and other trends accelerated during the pandemic, but Riverbridge’s forward-thinking portfolio companies have been in front of these opportunities for years. The choice to build earnings power for tomorrow is critical for successful long-term outcomes.

March, 2022
1st Quarter

Managing formidable market-shaping events with a long-term perspective

Despite market optimism at the end of 2021, investors were met this quarter with the first market loss in two years. Although corporate earnings were impressive, market-shaping events like a European invasion and inflation readings at a 40-year high had an impact on the S&P 500®.

December, 2021
4th Quarter

A Remarkable Finish Amidst a Turbulent Year

Despite an ongoing pandemic and the return of inflation, the market posted nearly a 30 percent return in 2021 and continues to demonstrate resilience time and time again. While forecasters don’t anticipate the same level of growth for 2022, other factors could potentially give investors confidence to withstand increased market volatility.

December, 2021
4th Quarter

Modern Back-office Solutions Provide Reliability and Resiliency

As the pandemic continues to shift the modern workplace, there is need for continued innovation in back-office solutions. More reliable mobile and cloud-based solutions are becoming imperative to scale and position a business for long-term growth.

September, 2021
3rd Quarter

Evaluating Quality Using a Hands-on Approach

At Riverbridge, we believe that investing in high quality companies—those with strong management teams, flexible balance sheets, and customers who depend on the good or service that they provide—will produce strong results over the long term.

September, 2021
3rd Quarter

September Market Setback Overshadows Continued Corporate Strength

While supply chain bottlenecks and inflationary pressures gripped the markets, Riverbridge portfolio companies continue to perform well due to their strategic market positions and internally financed growth.

June, 2021
2nd Quarter

An Enduring Approach to Risk Management

Unlike many investors who define risk as being different than the broader market or deviating from a stated benchmark, we define risk as the permanent impairment of earnings power. This unique approach continues to deliver a risk profile that helps our clients invest with endurance.

June, 2021
2nd Quarter

A Strong Post-Pandemic Economic Recovery

Riverbridge strategies all generated strong returns for the second quarter and year-to-date. Our portfolio companies also reported vibrant earnings and forward guidance and are well-positioned to thrive in the new post-pandemic economic normal.

March, 2021
1st Quarter

Gauging an Emerging New Normal

The societal and market upheavals of 2020 have caused and will continue to cause some economic hardships. However, they are also creating new opportunities for near-term and long-term growth.

March, 2021
1st Quarter

Ingenuity and Technology Drives a Surge of New Businesses

Despite prevalent restrictions on mobility and capacity, 2020 saw a spike in new business applications in the United States. This surge has profound implications for the pace and sustainability of our ongoing economic recovery, as well as the long-term value these new businesses will add to markets and stakeholders.

December, 2020
4th Quarter

Build on What Is Solid

In the midst of a rapidly changing world, companies built on innovation, flexibility, and responsiveness have exhibited the vision and fortitude necessary to create enduring value. 

December, 2020
4th Quarter

Challenges and Opportunities Within Rapid Change

The societal and market upheavals of 2020 have caused and will continue to cause some economic hardships. However, they are also creating new opportunities for near-term and long-term growth.

September, 2020
3rd Quarter

Maintaining a Long-Term Focus Amidst Market-Shaping Events

Fueled by monetary stimulus and an economy recovering faster than most predicted at the start of the pandemic, the third quarter of 2020 saw overall gains. However, the ongoing pandemic and political uncertainty in the upcoming final quarter of 2020 has the potential to offer more market-shaping events than any quarter in recent memory.

September, 2020
3rd Quarter

Cultivating a Long-Term Mindset

True value is never created quickly and requires endurance and a long-term mindset. Through discipline, resilience, and purpose, investors can avoid common pitfalls and experience the value creation that occurs over time.

June, 2020
2nd Quarter

A Strong Rally Amidst Tumultuous Terrain

The first half of 2020 was packed with significant news and events, namely the COVID-19 pandemic, which remains at the forefront of the world’s attention. Aggressive action by the Federal Reserve catalyzed a market rally in the second quarter, but investors remained discriminating about which businesses are well-positioned to navigate the unpredictable road ahead.

June, 2020
2nd Quarter

The Fundamentals of Embracing Change and Creating Value

It is impossible to predict the future. So we choose portfolio companies that are positioned for success amidst unpredictability—those that see, adapt, and invest in opportunity to embrace change and create value.

March, 2020
1st Quarter

Adaptability in the Wake of COVID-19

Agility and innovation play a critical role as companies make decisions about how to weather the storm and develop solutions for society in the midst of disruption from the COVID-19 crisis.

March, 2020
1st Quarter

Using a Long-Term View to Navigate Quick Market Changes

There was breathtaking volatility as investors navigated the 20-day transition from record highs to a bear market, largely influenced by the COVID-19 pandemic. Nevertheless, taking a long-term perspective means investigating the opportunities that lie in this changing environment.

December, 2019
4th Quarter

The Future of Productivity

Despite continuing and rapid technological change, productivity growth in the U.S. has dropped significantly in recent years. Today, a new wave of technological innovation is being leveraged to solve productivity problems in every industry and geography, with the hopes to enable the next surge in productivity growth.

December, 2019
4th Quarter

A Strong Finish to a Record Setting Decade

For the first time on record, the U.S. economy has started and concluded a decade without entering a recession, resulting in truly remarkable economic results. When contemplating the last ten years, and the strong finish to 2019, many investors are hoping for a repeat performance as we begin the new year.

September, 2019
3rd Quarter

The Human Capital Advantage

In today’s fast-paced world requiring ever-evolving skillsets, human capital has emerged as a strategic imperative for employers of all sizes and in all industries. No longer simply an HR issue, recruiting, training, and retaining employees is now a priority for the entire executive suite.

September, 2019
3rd Quarter

A Market Conundrum

Struggling global economies. Continued Brexit deliberations. The Fed reducing interest rates. The market conundrum that was the third quarter has set the stage for investors to ponder what is in store for the remainder of the year as well as for 2020.

June, 2019
2nd Quarter

The Future of Healthcare

The United States healthcare system is making necessary changes to keep up with rising health costs and needs—as well as investing in technologies that better understand, prevent, and treat a myriad of conditions.

June, 2019
2nd Quarter

Taking a Long View for Stronger Financial Returns

Despite a strong ending to the second quarter of 2019, market headlines are still not the key to achieving good long-term results.

March, 2019
1st Quarter

Understanding a Company Through its Accounting Practices

Accounting practices serve as a reflection of a management team. When analyzed properly, accounting does not answer many questions, rather it raises topics to further explore. Thoroughly understanding a company’s accounting practices and philosophy provides a richer fundamental understanding of a company and the integrity of its management team.

March, 2019
1st Quarter

A Strong Start to 2019 for Long-Term Investors

Equity investors could not have asked for a better start to 2019, as all major equity averages appreciated more than ten percent in the first quarter. Nevertheless, investors made rather large redemptions in the first quarter, likely reflecting some collective angst. The present mix of optimism and skepticism may actually be a good balance for long-term investors.

December, 2018
4th Quarter

Our Commitment to Internally Financed Growth

More than any other investment discipline we deploy, internally financed growth shapes our compelling downside protection in weak markets and contributes to the relative predictability of our investment returns.

December, 2018
4th Quarter

The Return of Turbulence

This past year forced investors to contend with renewed volatility spurred by increased inflationary pressures, a hawkish Federal Reserve, trade wars, and decelerating economic growth. As we conclude the year, investors are left to ponder whether 2019 will be reminiscent of the idyllic market of 2017 or if they will be forced to relive the headaches of 2018.

September, 2018
3rd Quarter

How We Assess Management to Identify Endurance

Enduring investments require leadership to cultivate a culture encouraging and even demanding constant innovation—even if it comes at the expense of near-term earnings.

June, 2018
2nd Quarter

The Importance of Sustainable Growth

While few dispute growth is a necessary ingredient for capital appreciation, an oft-neglected piece of analysis is the sustainability of such growth, which requires a deep look at a company’s strategic market position.

March, 2018
1st Quarter

Defining Growth Through Earnings Power

We focus on companies that are producing enduring unit growth while maintaining high returns on invested capital. Sustained unit growth combined with increasing returns on invested capital creates earning power.

December, 2017
4th Quarter

An Enduring Investment Approach is Rooted in What’s True

The ability to resist near-term market emotions and not deviate from their stated investment philosophy is what separates enduring managers from those that come and go based on short-term market phenomena.