It has been a challenging year across many metrics, and I thought it might be time for something a little more positive than we’ve been seeing around the globe and with investment and housing markets these days. We’re living in a world that seems to revel in a state of permanent crisis, but this doesn’t have to define us! Negativity can be overwhelming when that’s most of what we see in the news. If you’re as tired as we are of all the pessimism, keep reading because it’s time for a check-in with what’s better.
History has proven that humans are resilient in the face of challenge and this time is no different. Let’s have a look at where we’ve been and what’s been happening recently. There’s much to be optimistic about if you peel back the tedious outer layers of the legacy media to get past the “soap opera style” reportage that’s on the surface!
A Little Context and Perspective:
First, we all remember the “better times” (2019 through 2021) where investment and housing markets produced exceptionally strong returns and times were more than comfortable. In fact, things were quite “frothy”, and the proverbial pot was at a rolling boil. When we look in hindsight, all the excess growth from those years combined with massive government stimulus during the covid situation resulted in a “financial cauldron” which was destined to boil over. And boil over it did! First there was extremely high inflation which caused the threat of higher interest rates which then caused panic. And we all know that panic causes poor decisions, followed by more uncertainty, followed by selling pressure in most markets (stocks, bonds, and real estate). Such is the norm when things are uncertain. 2022 was not good, and YTD 2023 had not seen the rebound by the end of October that many had hoped. But that’s not the end of the story. In truth, there have been some very positive signs happening as of late and it’s worthwhile to take note. The cup is half-full.
October’s woes Replaced by November’s Growth:
Calendar year 2023 to October 31st had been the continual story of market ups and downs waiting for inflationary pressures to wane. However, things changed dramatically on November 1. Since that time, both stock and bond markets have been bullish, as there were reports of better-than-expected inflation in North America. This, combined with the expectation that interest rates may be nearing their peak, created a situation where markets rebounded quite strongly.
Historically speaking, stock markets are often challenging in the months of September and October with stronger markets seen in November and December. This year we saw that happen. Seeing this pattern play out provides a sign of optimism that we’re starting to see a bit of a return to normal market movements for this time of year. And, if we combine that fact with the optimism which comes from a pause in interest rate hikes, we could be in for more positive results.
While nobody knows what the future will bring, these notions are encouraging to see, nonetheless. Let’s take a snapshot of the brief period from November 1st to November 20th to have a look at what’s taken place*:
- Canada’s TSX Index has risen approximately 7.3%
- USA’s S&P500 Index has risen approximately 8.4%
- USA’s DOW Jones Index has risen by approximately 6.3%
- USA’s S&P Aggregate Bond Index has risen by approx. 3.2%
- USA’s DOW Jones E.W. Corporate Bond Index has risen by approx. 5.1%
*Numbers are for illustration purposes only
*Derived from Morningstar through Google Market Reports and S&P Global E.&O.E.
It’s important to note that by the end of October, equity and bond markets were not looking good at all. Psychologically speaking, when things appear quite bleak it’s not uncommon to want to make wholesale changes! This is a normal emotional response. However, again and again, we see that it pays to remain committed to one’s long-term investment plan. November has been a great indicator of this age-old tenet. As we often say over the years, just because markets are challenging doesn’t mean that you’re doing something wrong or need to change your portfolio managers or second guess your long-term plan. Challenging markets are part of every investor’s long-term journey, and our professional relationship with you entails keeping you focused on the horizon.
Does this recent strong positive movement mean that all our market woes are behind us? Absolutely not!! But it does lend credence to the fact that it’s wise to remain focused on your stated objectives and long-term plans, because the short term can often wildly mislead us either positively or negatively. Keeping one’s eyes fixed on the horizon helps sailors in heavy seas. This also remains true for investors.
For most of our adult lives we’ve been inundated by the horrors of war and the global turbulence that results from it. Whether it be WWII to the Korea war, Vietnam to Iraq, Afghanistan to Ukraine, and now Israel / Gaza, we feel the pain and suffering which grips us all. In addition, over much of the past 10 years we continue to hear the notion that humanity is a like a “plague” on planet earth and there’s little hope for a bright and successful future for generations to come. Global elites appear to be working overtime to consolidate their power and economic control. This barrage of negativity is not helping people young and old to share a sense of hope for the future. But is this all there is? Has humanity run its course? Are we naïve to believe that better things are possible? Or is there truly a chance for better days?
The truth is that many people the world over hold a strong belief that Humanity is a continually unfolding story of opportunity, growth, passion, and ingenuity. This is not to say that the journey is without its trials!
Thank-You for Your Trust and Confidence
As always, we cherish the many client relationships we’ve developed over the course of the last three decades. Your trust and confidence in our professional care is what makes this all possible. Our organization is blessed to have client relationships which are overwhelmingly positive and fruitful through good and through tough market cycles. I also want to draw attention and appreciation to your excellent “Google Reviews” as those show our greater community, we are who we strive to be! Your continual referrals and the multigenerational family relationships we serve are a testament to that truth. Thank you for making our organization the financial services firm of choice for you, your family, and your organizations. We are grateful.
Freely reach out to connect with us at any time. We are here for you.
As the Christmas season and New Year quickly approach, we wish you and your family all the best over the holidays and into 2024.
PRESIDENT, MATTE & ASSOCIATES FINANCIAL SOLUTIONS
Mutual Funds Representative, manulife securities investment services inc.
PS I hope this letter brings hope and if you are looking for more optimism check out this great group of individuals from around the world who appear to share the common vision that humanity is a true gift in the universe and the future of mankind can be whatever optimistic outcome we may strive to create together. It’s an organization that contains people from all walks of life, cultures, and belief systems and is not political in nature.
The Alliance for Responsible Citizenship (ARC): www.ARCforum.com