The first quarter of 2009 has finished and although equity markets are up from their lows the economic landscape hasn’t changed dramatically for investors or businesses. Unemployment continues to rise, the cost of capital has remained relatively high and transparency in corporate earnings has been inadequate at best. Companies will begin reporting their numbers soon, but with GDP contracting by a significant amount in the past two quarters investors are going to be looking for stability rather than erosion or growth in earnings.

Companies with strong defensive balance sheets and cash flows have weathered the storm well so far. Companies suffering from an abundance of debt and poor management have moved in the predictable direction of continued deterioration. After nearly every stock suffering through the decline in equity markets this is an environment of corporate survival. We are in an environment where corporate fundamentals will reign and the strong will survive. If a company has low debt, strong margins, can maintain profitability and can gain market share against competition then these are the investments an investor wants to target for their portfolio.

An investment portfolio, properly constructed for risk, should be balanced in a number of areas. Having an adequate exposure to different assets, diversification (amongst countries, sector and businesses) of those assets and avoiding cyclicality goes a long way to protecting your capital (capital preservation) from significant events in equity markets. While I would like to be able to take full credit for the better returns of my portfolios against broader indexes the real reason I’ve feared well is more to do with how my portfolios have been constructed and by maintaining a focus on risk.

I’m going to provide insight into my overall portfolio (all invested assets combined) to give a sense of how I’ve positioned myself now and for the future.

First, here is a list of my investing activities in March:

CDN Buys:

Power Financial Preferred Series H (PWF.PR.H), Russel Metals (RUS), Manulife Financial (MFC), Canadian Tire (CTC.A), Husky Energy (HSE), Fortis (FTS)

US Buys:

Exelon (EXC), Eaton (ETN), Whirlpool (WHR), Berkshire Hathaway (BRK.B), General Mills (GIS), Smuckers (SJM), United Parcel Service (UPS)

Sell:

PowerShares DB Crude Oil ETF (DTO)

The only new addition to any portfolio was Canadian Tire (CTC.A). This is a stock I’ve watched with interest for some time after selling my position in Reitman’s (RET.A) prior to December of 2008.