Harbour Trust & Investment Management Company is monitoring the rapidly evolving situation related to the Coronavirus (COVID-19). We are communicating with you to provide an update on our preparations to operate during this evolving situation and with our thoughts on the global financial markets and our investment strategy.

Our top priority is to ensure continuity of service to our clients while maintaining the health and welfare of our staff.

On March 11, 2020, the World Health Organization characterized COVID-19 as a global pandemic. Harbour Trust has a Business Continuity Plan and a Pandemic Plan which guides our response to pandemics such as this. Our pandemic continuity planning includes instituting proactive health measures, social distance protocols, and a remote access program in an effort to slow acceleration of the virus. Many of our staff have remote access and work from their homes, or while traveling, on a regular basis. We will be testing our remote access program in the coming week to ensure that it will be effective if instituted on a wider basis.

Harbour Trust staff will be restricting their domestic travel to essential travel only, with no international travel. Harbour Trust staff will also be restricting client meetings to essential in-person meetings only, with teleconference meetings being the preferred form of communication. We appreciate your understanding in that regard and will continue to reach out to clients regarding individual meetings.

We want you to know how much we appreciate your business and truly care about the wellbeing of you and your families.

Global Market/Strategy Update

Benjamin Graham, the late mentor of Warren Buffett, often talked about distinguishing between speculators and investors. Speculators care mainly about trying to anticipate and profit from market fluctuations.  Investors care mainly about finding good businesses at suitable prices and acquiring them. Harbour Trust does not speculate about short-term market movements and is solely focused on acquiring quality businesses that are fairly priced. Our portfolio holdings do not include highly leveraged companies that in times of economic stress can see permanent loss of value due to weak financial footings. We have instead focused on businesses that can withstand the natural ebbs and flows of the economy, and provide long-term staying power. Examples of businesses that may suffer permanent loss of value if the COVID-19 virus sharply curtails consumer spending for many months include airlines, cruise lines, leveraged entertainment, leveraged energy, and businesses that rely on large amounts of debt to fund their operations.

The US economy was very strong throughout the first half of Q1, and should be able to withstand short- term interruptions that could likely subside in the next few months. Extended interruptions would increase the probability of a mild economic decline. While broad US equity markets have experienced declines from their peaks over 20%, most balanced investment portfolios have experienced much smaller declines. Increasing use of Exchange Traded Funds (ETFs) for speculative trading and large-scale computer-generated algorithmic trading have clearly accelerated large sell-offs in the global markets. While the possibility that further market volatility and declines are realistic, we are confident that our portfolio holdings are well situated to weather the current declines and emerge without permanent value loss.