Good morning,

I hope everyone is prepared for the holiday season and looking forward to finding time to enjoy some downtime.

It’s hard to believe that 2023 is coming to a close, but as we prepare for the year ahead, what better time than the holidays for some reflection.

Growing up in the Henderson house, it was customary for our family to find time to curl up in front of the wood burning fireplace and take in a few good movies. While we would always ensure we carved out enough time to spend Christmas with the Duke and watch a few John Wayne movies, all the kids and cousins would attempt to watch the complete series of Rocky movies over the holidays. Classic!

These days, when I reference The Eye of the Tiger in my house, my girls think it’s a Katy Perry reference, but most of us would associate the expression “the eye of the tiger” to that 1982 tune by Survivor. There are a few ways the expression can be interpreted, but for me it reminds me of a Buddhist parable, one that I thought I’d share with you that will hopefully inspire some reflection on true wealth.

Tiger and the Strawberry

Once upon a time, as a man was walking through a forest, he saw a tiger peering out at him from the underbrush. As the man turned to run, he heard the tiger spring after him to give chase.

Barely ahead of the tiger, running for his life, our hero came to the edge of a steep cliff. Clinging onto a strong vine, the man climbed over the cliff edge just as the tiger was about to pounce.

Hanging over the side of the cliff, with the hungry tiger pacing above him, the man looked down and was dismayed to see another tiger, stalking the ravine far below. Just then, a tiny mouse darted out from a crack in the cliff face above him and began to gnaw at the vine.

At that precise moment, the man noticed a patch of wild strawberries growing from a clump of earth near where he dangled. Reaching out, he plucked one. It was plump, and perfectly ripe; warmed by the sunshine.

He popped the strawberry into his mouth. It was perfectly delicious.

As we sit back and derive meaning from this little story, it’s interesting to understand what the Tiger represents. Perhaps the tiger represents the inflation beast that we have been trying to tame over the last few years? We all know the price of strawberries these days!!

We are all facing the eye of the tiger – we are all plagued with fear, worry and regret, the tiger is watching you already. Getting too caught up in celebration, or despair, can cause us to lose sight of the fleeting nature of our lives, and the importance of savoring each present moment to the fullest.

“Tigers above, tigers below. This is actually the predicament that we are always in, in terms of our birth and death. Each moment is just what it is. It might be the only moment of our life; it might be the only strawberry we’ll ever eat. We could get depressed about it, or we could finally appreciate it and delight in the preciousness of every single moment of our life.” - Pema Chodron

The tiger at the top of the cliff embodies the past.

The tiger at the bottom signifies the future.

The mice signify time, ticking away.

In our view, true wealth is made up of our resources, our time, our energy, and out capital. These resources are finite, your time and your energy are precious. The only thing we truly have is the present moment, and our moments, our strawberries are ours to savor.

“Realize deeply that the present moment is all you have. Make the now the primary focus of your life.” Eckhart Tolle

And now, to the markets

As we head into the end of 2023, it’s been quite the end to the year. Fortunately, both global equity and bond markets appear to be finishing the year on a strong note. This strength can be attributed primarily to two factors. First, the rate of inflation continues to show signs of moderating, raising expectations that central banks are at the end of their rate hiking cycles. And second, while growth has slowed – in some areas more than others – economies have generally handled the challenges better than expected.

While 2023 had its ups and downs, it has proven to be a year of economic and market resilience. On the economic front, growth has slowed but there have been positive surprises, especially in the U.S. where the consumer has been stronger than elsewhere. The inflation backdrop has meaningfully improved, transitioning from an accelerating rate last year to a decelerating one currently. This led to a better investing experience this year as volatility declined, as it historically does when inflation falls from high levels. Lower inflation and volatility have been welcome developments in the bond market, where returns have been more normal and favourable compared to last year. Equities have also seen reasonable returns, with some markets performing better than others, driven particularly by large cap technology stocks. It is worth noting that the breadth of stock market gains improved towards the year’s end, suggesting more stocks have been participating in the rally of late.

What’s in store for 2024? Our team believes the combination of high rates and restrictive lending standards is a recipe for a recession, particularly in regions like Canada and Europe where growth figures have been underwhelming. There is the chance the U.S. and other regions avoid a recession, and instead experience a “soft landing”, where growth slows but does not outright decline. In such a scenario, earnings would not decline, but would keep growing, more modestly, and help the equity market generate further gains. Nevertheless, the range of potential outcomes for equities over the next year remains wider than normal. Meanwhile, bond yields are significantly higher than they have been in some time which has re-established their role in portfolios. More specifically, bonds of high-quality issuers such as governments and highly rated companies now offer reasonably attractive levels of income combined with the potential to shield portfolios to some degree from any resurgence in volatility should a recessionary scenario develop.

Our approach to managing portfolios in 2024 will be consistent with this past year: treading more cautiously than normal given the range of potential outcomes discussed above. We expect to remain patient with the equity allocations in our portfolios, believing that the window of vulnerability that lies ahead will prove to be temporary. On the fixed income front, we continue to look for opportunities where appropriate to take advantage of higher yields that are available.

Embrace your moments.

“Time is the substance from which I am made. Time is a river which carries me along, but I am the river; it is a tiger that devours me, but I am the tiger; it is a fire that consumes me, but I am the fire” - Jorge Luis Borges

Sam Harris suggests that the human experience is filled with infinite potential, possibilities, and potentialities. We are constantly seeking to understand our own purpose in life and the meaning of existence. We are often too caught up in our plans for the future or regretful of the past. It’s often difficult to truly appreciate life in the present moment. Life is always happening in the now, and the present moment is the only place where we can find true consciousness and fulfilment.

“With the past, I have nothing to do; nor with the future. I live now” - Ralph Waldo Emerson

It is often said that the present moment is the only time we have to live. The past is gone, and the future is not yet here, so making the most of our present lives is crucial for a better life tomorrow..

What better time than now, to start to acknowledge and accept your tigers, through acknowledgement and acceptance will allow you find purpose and presence in your moments.

Your life is a culmination of precious moments. Approaching each moment with presence, appreciation and intention will enable you to live life with purpose, on purpose. May you enjoy the holiday season this year, find time to rest, reflect, recharge and rejuvenate as we prepare for the journey ahead.

Happy holidays from your friends at Henderson Family Wealth

“Smile, breathe, and go slowly.” Thich Nhat Hanh

Be well and enjoy the moments,

Derek Henderson