“Cultivate the habit of being grateful for every good thing that comes to you, and to give thanks continuously. And because all things have contributed to your advancement, you should include all things in your gratitude.” Ralph Waldo Emerson

Good morning and happy Monday!

It’s been a while since I’ve sent out a Monday morning musing….we had covid rippling through the house a few weeks ago, which certainly put a wrinkle in the routines. We also celebrated thanksgiving weekend here in Canada last week with a holiday Monday! I trust everyone was able to enjoy the long weekend, some beautiful weather and had an opportunity to be grateful for some time with friends and family.

Gratitude

Thanksgiving – what a perfect reminder of the importance of gratitude. Emerson offers a helpful introduction into what practicing gratitude can look like….gratitude as a concept, when put into daily practice, can lead to a career and a life of abundance.

It’s been said that “gratitude is not only the greatest of virtues, but the parent of all others.” By definition, gratitude is “the state of being grateful.” It’s a way of life or, in the words of the philosopher Henri Frederic Amiel, “Gratitude is shown in acts.”

According to Dr. Robert Emmons, the feeling of gratitude involves two stages:

1. First comes the acknowledgment of goodness in one’s life. In a state of gratitude, we say yes to life. We affirm that all in all, life is good, and has elements that make worth living, and rich in texture. The acknowledgment that we have received something gratifies us, both by its presence and by the effort the giver put into choosing it.
2. Second, gratitude is recognizing that some of the sources of this goodness lie outside the self. One can be grateful to other people, to animals, and to the world, but not to oneself. At this stage, we recognize the goodness in our lives and who to thank for it, ie., who made sacrifices so that we could be happy?

The two stages of gratitude comprise the recognition of the goodness in our lives, and then how this goodness came to us externally lies. By this process, we recognize the luck of everything that makes our lives—and ourselves—better.

Gratitude is a selfless act. Its acts are done unconditionally, to show to people that they are appreciated. Gratitude is an emotion similar to appreciation, it can be contagious and psychology research has found neurological reasons why so many people can benefit from this general practice of expressing thanks for our lives, even in times of challenge and change, benefits include….

• Enhanced Wellbeing
• Deeper Relationships
• Improved Optimism
• Increased Happiness
• Stronger Self-Control
• Better Physical and Mental Health
• An Overall Better Life

What better time than now to incorporate the practice of gratitude into your day. This very evening, before you go to sleep, think of the positive things that happened during the day. Take a moment to do this every night. If you have children, take a moment with them before bed-time to ask them to think about something they’re grateful for themselves. Set a good example by sharing what you’re grateful for, as this shows children the importance of the practice.

All of these actions, however little, help shape a culture of gratitude and can ensure you continue working toward discovering true wealth with purpose.

“I awoke this morning with devout thanksgiving for my friends, the old and the new.” Ralph Waldo Emerson

And now, to the markets

As with most of the year, global markets have experienced more negative than positive days in recent weeks. However, there was a notable change in equity market behavior in recent days. We are not convinced it marks any sustainable shift in trend. Nevertheless, it was surprising and something we pay attention to given historical precedent.

The U.S. consumer price index (CPI) for the month of September was released this past week. Unfortunately, it was not only higher than expected, but higher than the preceding month. The “core” measure, which excludes food and energy prices, rose to a pace of 6.6% year over year, which represents a new multi-decade high. While it is only one data point, its release undoubtedly disappointed investors who were looking for a further slowing of pricing pressures after the data during the summer suggested the peak of inflationary pressures may have passed. Overall, the persistence of inflation should incentivize central banks to remain on their rate tightening paths.

The equity market’s reaction to another string of disappointing inflation data? A substantial decline initially, in-line with what investors would have expected. But, something unexpected happened thereafter. After the initial fall, equity markets sharply reversed course and finished meaningfully higher. In fact, it was one of the larger “intraday reversals” (when the market starts off higher/lower and finishes lower/higher) for the U.S. market on record. Bonds responded in a somewhat similar fashion, albeit less emphatically. Overall, it was a surprising development that caught most investors off guard given how poorly markets had responded to high inflation readings throughout most of the past year.

There’s no fundamental explanation for this recent turnaround. Moreover, it’s just one day and may turn out to be an anomaly. But, this development left me and the team reflecting on a few learnings we have gleaned over the years, which are all related to some extent. First, when investor sentiment is near an extreme, there may simply be a lack of enough sellers to push prices meaningfully lower. Second, some of the largest daily stock market returns can occur at the most challenging of times, when investors least expect it. Finally, equity markets often bottom on bad news, in anticipation of future improvement.

We think it’s too early to focus on a sustainable recovery just yet. After all, the economic slowdown, which is underway, is expected to intensify in the months to come as the meaningful tightening of financial conditions works its way through the global economy. Ironically, that may solve for the inflation challenge that markets have been grappling with all year, which may help get us get closer to an eventual market inflection point. In the meantime, we plan on shifting our attention to the third quarter earnings season, which has now officially kicked off and we’ll continue to shift our positioning to continue to take advantage of the uncertainly. As we trust our process, it will prove our actions today provide the opportunity of tomorrow.

“As we express our gratitude, we must never forget that the highest appreciation is not to utter words, but to live by them.” John F Kennedy

I admit, it’s easy to run across the word “gratitude” these days, but I still wanted to bring attention to the importance of it, it’s even easier to forget about it. Under the deluge of emails, phone calls, and life and work demands we face daily, gratitude often gets left behind. Gratitude is a way for people to appreciate what they have instead of always reaching for something new in the hopes it will make them happier or thinking they can't feel satisfied until every physical and material need is met. Gratitude helps us refocus on what they have instead of what they lack. And, although it may feel contrived at first, this mental state grows stronger with use and practice.

As John F Kennedy once said “We must find time to stop and thank the people who make a difference in our lives.” Today, is a new day, a new beginning. As we head into the week, try to carve out time for yourself, and for all of those wonderful people around you that you are grateful for as well.

“This is a wonderful day, I have never seen this one before.” Maya Angelou

Be well & enjoy the moments

Derek