“Difficult roads often lead to beautiful destinations” Unknown
Good morning,
It’s RRSP season --- the last week to contribute to the RRSP – if you’re making a contribution this year, please reach out today (or sometime this week)!
I trust everyone enjoyed the long Family Day weekend. It was a beautiful day yesterday, one that I’m sure most of us needed…..the time to spend with family and try to find time to recharge. It’s been an exhausting few years, to say the least.
As always, I found time for some weekend reading and was introduced to author Arthur C. Brooks, contributor to The Atlantic – thanks for the recommendation DC! Like most of us, over these last few years, I’ve found myself in a healthy search for improvement, balance and purpose. I keep circling back to lines that were sent to me from a good friend of mine…"the remedy to exhaustion is not necessarily rest, the remedy to exhaustion is alignment”
Alignment …..what a wonderful word for us as we continuously define our goals and attain a better understanding of our own unique search for happiness. Arthur C. Brooks shares Habits That Lead to Happiness, suggesting that your well-being is like your investment account: The sooner you invest, the greater your returns will be.
“Imagine yourself 10 years from now……many people realize the importance of having made good financial decisions in their earlier decades. Those who planned ahead and saved up are more likely to be able to support themselves in comfort; many of those who didn’t, can’t. Something similar happens with happiness”
Brooks suggests that each of us has something like a Happiness Investment Account that we invest in when we are young, and that we get to enjoy when we are old. And just as financial planners advise their clients to engage in specific behaviors—make your saving automatic; think twice before buying that boat—we can all teach ourselves to do some very specific things at any age to make our last decades much, much happier.
Maintain a healthy body weight. Eat a diet with lots of fruits and vegetables and moderate serving sizes, but avoid yo-yo diets or intense restrictions that you can’t maintain over the long run.
Prioritize movement in your life by scheduling time for it every day and sticking to it. Arguably the single best, time-tested way to do this is by walking daily.
Practice your coping mechanisms now. The earlier you can find healthy ways to deal with life’s inevitable distresses, the more prepared you’ll be if ill luck strikes. This means working consciously—perhaps with assistance from spiritual practices or even therapy—to avoid excessive rumination, unhealthy emotional reactions, or avoidance behavior.
Keep learning. More education leads to a more active mind, and that means a longer, happier life. That doesn’t mean that you need to go to Harvard; you simply need to engage in lifelong, purposive learning. For example, that can mean reading serious nonfiction as part of a routine to learn more about new subjects.
Do the work to cultivate stable, long-term relationships now. For most people, this includes a steady marriage, but other relationships with family, friends, and partners can fit in this category as well. The point is to find people with whom you can grow, whom you can count on, no matter what comes your way.
These are wonderful recommendations on how to find both happiness and alignment. If you want to ascend to that upper branch of happiness, following these steps as best you can is the most reliable way….wonderful advice.
“There is no house like the house of belonging.” David Whyte
And now, to the Markets
We are seeing early risk-off moves this morning, attributed to Russian President Putin's decision to recognize and order troops into two breakaway regions of eastern Ukraine. Although not certain if latest development will lead to escalation of violence in region, Biden ordered ban on US investments in breakaway regions and is set to announce additional measures today.
Of course, these geopolitical developments add to headwinds facing market and economy, which include central bank preparations to tighten policy and come as sell-side economists ramp up bets for faster Fed tightening. Fed Governor Bowman said Monday she supports forceful action if needed to curb inflation and added size of March move will depend on data in coming weeks. Some thoughts Ukraine situation could prompt a more cautious central bank policy response
Our take, we are starting to see even more opportunity, particularly in potential bond movements. Rather than dwell on the recent past, it is more important to focus on the future prospects and how to position accordingly. And, while the longer-term return prospects for fixed income remain challenging and yields are still unremarkable, there are some pockets within the bond universe that may arguably be more attractive than they have been in recent history. For example, short and longer-term government bond yields have not been this high since before the pandemic. The yields are still far from being outright attractive, but have undoubtedly become more interesting because of the sell-off. Moreover, one could argue the pendulum of expectations around rate hikes may have swung too far in one direction with markets now expecting close to six interest rate increases in Canada and the U.S. this year.
We are keeping a close eye on this…….should inflationary pressures recede through the second half or central banks approach its rate hiking cycle more gradually than is currently expected, the environment could shift yet again, and this time, in favor of the bond market. As you know, it is our responsibility to be on guard and identify opportunities that arise to reposition portfolios, even if changes are incremental and at the margin. We believe such an occasion has started to emerge for investors, particularly in higher credit quality fixed income given the broad pressure the bond market has experienced. We characterize the opportunities as noteworthy and deserving of some consideration, which is good timing for new money into the market as we head into March….opportunity amid uncertainty.
As we head into the week, take an inventory of your habits and behaviors today, and see where you need to invest a little more time, energy, or money to start moving in the right direction. Everyone loves a happy ending, especially in the story of their own life……start writing that ending today and remember, if your path is difficult it means your purpose is bigger than you thought.
“Appreciate where you are in your Journey, even if it’s not where you want to be. Every season serves a purpose” Unknown
Be well & enjoy the moments
Derek