“One day you will wake up and there won’t be any more time to do the things you’ve always wanted. Do it now” Paulo Coelho
Good morning,
What a wonderful weekend and Happy Father’s Day to those dads out there, I hope everyone found time this weekend to slow down from your busy lives and enjoy the moments.
Mahatma Gandhi once said, “There is more to life than increasing its speed.” In the chaotic existence that is the twenty-first century, there are too many things competing for our attention. The exhaustion of constant busyness is real. The pressure to pack your life full of activity and maximize every waking time can be stressful. In world that we find ourselves in today, there is a real urgency of slowing down, to unplug and give ourselves permission to be still.
For me, being a father is a constant reminder that our children depend on us, rely on us, and they learn from us….and our time to teach is limited. The average human lifespan nowadays is 80 years. That means, your life is made up of (hopefully) 4,160 weeks which is certainly a limited time to have the impact that you want to have on your family, your community and to also live the life you’ve always dreamed of…. The scarcity of our days makes the need for slowing down and being present extremely important.
Of course, this concept of slowing down also applies to those who not parents as well….our lives are never short of something to worry about or somewhere you need to be. It can be much harder to commit to being present in the moment when we are moving too fast. As Mark Twain infamously said, “I’ve had a lot of worries in my life, most of which never happened.” By forcing yourself to be present, you push those worries out of your head, and fully focus on the task at hand. It’s an especially useful practice when you’re with your kids.
Yeah, it can be boring to play LEGOs endlessly with a toddler. But giving them that attention and letting them explore that unstructured time is invaluable to both of you. And that quiet, small moment making a castle out of blocks is going to be the thing they remember more than any big “meaningful” moment that you try to plan.
Our kids are always watching, which is why presence is the key to good parenting. It’s foundational to everything else. The house runs smoother, kids are better behaved, and you keep your feet firmly on the ground in front of you, making your parenting journey a little more stable.
What you can do today…….make it a point to spend some time with your kid after dinner. You don’t need to do anything specific or grand, just go along with whatever they want to do.
Whatever their favorite thing is, it’s now your favorite thing.
When they get older, they’ll realize your actual favorite thing was just spending time with them.
“Don’t worry that children never listen to you; worry that they are always watching you.” Robert Fulghum
And now, to the markets
Global markets have been under notable pressure in recent days. The trigger was a recent inflation report that has investors believing central banks will have to tighten financial conditions more than planned, thereby increasing the odds of a future recession.
The most recent U.S. inflation reading for the month of May came in at 8.6%, representing the highest inflation rate in over 40 years. It indicates pricing pressures are not only elevated, but still rising. That stands in contrast to what some investors were hoping for: signs that inflation may have already peaked and was on the verge of easing. Core inflation, which excludes food and energy, did show some moderation, but it too was higher than expected. Moreover, the inflationary pressures that began well over a year ago in areas like vehicles and household goods have broadened to other categories such as public transportation and rent. Some of these areas have historically proven to be more persistent and slow to normalize, suggesting pricing pressures are at risk of being uncomfortably high even after inflation peaks and begins to moderate, which remains a possibility for the second half of the year.
Following the inflation release, bond yields rose meaningfully and markets now believe the U.S. Federal Reserve’s “Federal Funds Rate” will reach 3.4% at year-end, versus the 2.4% it was expecting just a few months ago. It’s not necessarily that much different in Canada. In other words, markets expect central banks to raise rates even more forcefully than what they have telegraphed thus far.
The predominant concern is higher rates will lead to tight financial conditions. This is often characterized by a material change in the availability and access to credit that causes consumers and businesses to re-evaluate their spending, hiring, and capital expenditure plans. Historically, these kinds of conditions have resulted in recessions. Not surprisingly, recessions, or even the anticipation of them, have driven some of the weaker periods of stock market performance. On the other hand, some of the strongest periods of market performance have traditionally begun amidst periods of economic hardship, as markets begin to anticipate the potential for an economic and earnings recovery well ahead of one actually occurring.
The odds of a recession over the next few years have undoubtedly risen, and may continue to increase through the second half of the year given the tightening of financial conditions. There are early signs of a slowing in some of the more interest rate sensitive sectors of the North American economy, such as housing for example. In some ways, this comes as a relief to many who have been concerned, particularly in Canada, about the seemingly endless rise of house prices and the significant decline in affordability. A slowing in the domestic housing market, should it occur, may ironically be a positive development and a sign that policy makers are effectively reining in pricing pressures in some parts of the economy. Elsewhere, some of the indicators in our U.S. recession scorecard framework are also moving in a direction that suggest the odds of a recession are rising, but not necessarily imminent.
We have been preparing our portfolios for a wide range of economic outcomes by undertaking regular portfolio reviews, re-evaluating positions across all asset classes, and considering rebalancing to the targets in our investment plans. Moreover, episodes of volatility can typically be characterized by an indiscriminate amount of selling across all assets, regardless of quality. This presents us with opportunities to add to existing holdings and build new positions as well. It’s a busy time and despite the nervousness in the overall market, we are actively managing portfolios with discipline and our dedicated process, which enables is to take advantage of opportunity amid uncertainty that will benefit investors over the long term.
“Slow down everyone, you’re moving too fast – frames can’t catch you when you’re moving like that” Jack Johnson
As we head into the week, think about slowing down…..it’s about making your life your own again and about getting enough moments in your life to spend them on the things that really matter. It also means a mindful focus on your current task rather than switching between a multitude of tasks, focusing on none of them, and accomplishing little. Leo Babauta of Zen Habits recommends you focus on what’s going on right now…on your actions, on your environment, on others around you.
He writes: “It’s not enough to just slow down — you need to actually be mindful of whatever you’re doing at the moment. That means, when you find yourself thinking about something you need to do, or something that’s already happened, or something that might happen … gently bring yourself back to the present moment.”
Slowing down is a conscious choice, and not always an easy one. But it’s possible to feel less busy and enjoy the present moment more.
“Slow down and enjoy life. It’s not only the scenery you miss by going too fast — you also miss the sense of where you are going and why,” Eddie Cantor
Be well & enjoy the moments
Derek