ACCORDING TO JIM CARREY
When you think about the most important thing in the world, or in life, what comes to mind?
According to an article I read on LinkedIn recently, here are the most important things in life – coming from actor and comedian Jim Carrey, someone we might say “has it all”:
- Health
- Family
- Love
- Purpose
- Time
I would agree, these are all critical components to a life well-lived. Although not included – but just as important – are these elements: Relationships and Security.
It’s my belief that you can’t have one without the other – because relationships can only grow through frequent, positive communication, and from that communication grows a sense of security you can rely on. That’s what I am trying to build with this monthly blog: your sense of security in your financial future.
On that score, as 2022 comes to a close, let’s take a little walk down memory lane, and review what I had to say in this very eventful year.
WINTER WISDOM
Market timing is impossible.
You probably already knew that, but what you might not have realized was what a good thing FOMO (Fear Of Missing Out) can be for your portfolio. That’s why I made it the focus of my blog back in January. The rationale? There are significant gains that come from staying invested (i.e., from having a fear of missing out when the market goes up), and if you shift your mindset towards buying and holding versus performance-chasing, you’re setting yourself up for success.
Holding, however, takes patience. So does contemplating this question: “Wouldn’t it be great if we had universal health care in Canada?” When February rolled around, I couldn’t stop thinking about it. Myth says we have it, but then why do we still have to pay out of pocket for necessities like prescription drugs and dental care – something we can avoid only if we have health insurance coverage through our employer?
Ultimately my question was this: “Are you prepared?” Here was one piece of advice I offered: if you’re still working, check with your employer about coverage, as some will provide a degree of benefits even when you are retired.
Then in March, something happened that (depending on your degree of cynicism when it comes to politics) I think very few of us could have prepared for: Prime Minister Justin Trudeau and NDP leader Jagmeet Singh agreed that the NDP would prop up the Liberal minority government until 2025, in exchange for more spending on social programs. Knowing that spending would likely result in higher inflation and higher deficits, I felt prompted to ask: When should you take out your RRSP? To which I answered: it all depends on how you answer one question: Do you think taxes and inflation are going to go up, or down?
SPRING’S SILVER LININGS
Netflix stock dropped a remarkable 38% in just five days. Also down was the tech-heavy NASDAQ index, by 15%. Year-to-date volatility, created by the war in Ukraine, was blanketing all of the indexes.
In May, I thought it was quite possible that a recession was on the way – but I didn’t (and still don’t) believe it’s a problem that can’t be overcome. Fact is, we really need inflation to go down, and declining growth is one way of accomplishing that. A decline in economic activity has the capacity to help alleviate the supply chain issues we have all encountered: because demand will be lower, supply chains may get the break they need to catch up.
SUMMER SALES
By the beginning of summer, what was once a volatile market had become a straight-up emotional rollercoaster. Still, an opportunity became clear: with plenty of stocks on sale, what better time to carefully buy companies at a discount? By Warren Buffett’s wisdom, to “Be fearful when others are greedy, and be greedy when others are fearful”, buying is exactly what we did.
One more thing: Client Corner, a new, occasional section of our blog, was introduced. You’ll have to revisit June’s entry to see what the excitement was all about.
There is some excitement from July I’ll remind you of outright, though: remember when Colleen went skydiving?! As someone who doesn’t believe in jumping out of a perfectly good airplane, I found this hard to understand. But, she had an incredible time, and impressed me even more than she already does.
Not so impressive, however, were the equity markets in July, which were at their worst since 1970. With the exception of energy, every sector was down. Rising interest rates meant that bond prices were being pushed down as well.
As for August, I can summarize it with one word: Inflation. At the grocery store, at the pump, around the world. So my advice remained: stay invested! Which is especially important if the cost of living continues to go up over the long-term.
FIGURES OF FALL
Investing: it’s not a sprint, it’s a marathon.
As tempting as it is to go online every day, even multiple times a day, to see how the market is doing, it’s not worth the stress. Why? Because, over the course of almost a century, the S&P 500 (which we consider to be the best measure of the market overall), has moved in an overall upward trajectory. So, without checking your devices, you already know what’s going to happen.
With market opportunities on the rise, my September suggestions were:
- Shop at a discount
- Pay down debt or invest
- Employ dollar cost averaging
I also wrote about how fortunate we are to live in Alberta – and the fact that many Canadians from other provinces agree. In the second quarter of this year, Alberta experienced its highest positive net migration since 2014: almost 10,000 people. And why were they moving here? “Lower taxes, better quality of life and endless opportunity.” That’s according to an ad, with the headline “Alberta Is Calling,” running on the subway lines of Toronto.
Moving from “Alberta is Calling” to Cryptocurrency – in less than one week in November, the world watched as FTX fell to bankruptcy from a market valuation of $32-billion USD. It’s estimated that more than one million people may have lost their money in FTX – losses in the form of the cryptocurrencies they traded on the FTX platform, and the losses incurred by investors in the company, including the Ontario Teachers’ Pension Plan. It certainly appears there were some shenanigans going on: FTX founder Sam Bankman-Fried has been indicted by the US government for “a host of financial crimes.”
THE FAMILY FILES: 2022 CAPSULE
Our family had a busy and happy year. Here are just five of the many personal highlights:
- I was fortunate enough to be at Game 1 of the Flames-Oilers series – the one where Calgary beat Edmonton 9-6 in the highest scoring Battle of Alberta playoff game in history
- We skied, we camped, we swam, we had bonfires with friends alongside beaches and in forests alike…and we did it all with lots of ice cream in hand. (Well, maybe not while skiing).
THANK YOU
I couldn’t do what I do without you – so, thank you very sincerely.
In the year ahead, what will we be focusing on, and what do we want our clients to be focused on? You might have guessed: STAYING INVESTED.
From me to you, from my family to yours, and from all of us here at RBC Dominion Securities: we wish you a Merry Christmas, Happy Holidays, and a Happy New Year.
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The greatest compliment we can receive is a referral to someone you care about who would appreciate the same value we take pride in giving you. If you have someone in mind, feel free to contact me at any time. Thank you very sincerely.
Jason de Weerd, CFP, CIM
Investment Advisor & Financial Planner
RBC Wealth Management
RBC Dominion Securities Inc.
1-403-213-6731