Reflecting on the past year and looking forward to the next is a great annual activity. Health and fitness, friends and family, career and financial well-being all get a once over. And…when all is said and done, we can mostly nod our collective heads in satisfaction and appreciation even in the challenging years.

Looking back on 2022, we saw significant changes in the financial markets as the long process of unwinding COVID-19 supports began. What seemed like temporary inflation turned into something more stubborn and as a result, interest rates rose steeply and quickly. We believe that we are in the final phase of this tightening and expect to see the conclusion of rate hikes by the end of the first quarter of 2023. This period presented both challenges and opportunity in building and managing investment portfolios. On one hand, we were able to add into fixed rate investments at prices and yields not seen for some years, and on the other, we had to accept a repricing of equity securities as valuations compressed. 

As we move into 2023, we are satisfied that the increased yield added in the past 12 months will provide some relief to the negative volatility of 2022. Most of the companies that we hold in our Canadian equity strategy increased their dividends for the first time in 2 years, and we think that they are well positioned to continue returning profits to investors in that way. It wouldn’t be a newsletter if I failed to mention the magic of compounding dividends! The increased income paid by the companies and securities that you hold will benefit your financial plan for years to come. Taking advantage of difficult periods ensures that we are well prepared when the markets inevitably move forward again. As always, we continue to review the success of each asset class and the impact on your individual investment policies, making changes as required.  

Thank you so much for your trust and support, and we wish everyone a happy holiday season.

Warm regards from all of us at Livingston Wealth Management