Year End & Going Forward
This year has been quite positive for markets and returns. We are very pleased that 2020 progressed like we had expected.
We have received a lot of calls and emails from individuals nervous about a large correction. We see this as a reasonable view when you consider the current long positive trend in the market. Since the market bottom in 2020, we have seen a series of small corrections of 5-7%. Each time the market recovered to all-time highs. Small corrections can happen at any time and trying to time these is not productive. We use cash during these dips as an opportunity to buy positions at a discount and overall we stay invested.
Large corrections historically come when the risk of a recession is high. At the present time the economy is still expanding and recovering from the Covid-19 setback. Conditions at this time are not typical for a large correction.
Going forward, we see much of the same conditions for the first half of the year. The next challenge the markets will face are interest rate hikes in Canada and, especially, in the US. The size and frequency, interest rate hikes will have a large effect on the overall market. The goal of interest rate decisions will be to make slow and moderate increases to try and create a “soft landing” for the economy. However if they are forced to raise rates aggressively we could see more volatile markets in the second half of 2022.
We believe our Smart Income Strategy is the best way to handle any of the market volatility we could see and we are confident going into next year.
We would like to thank clients who were comfortable enough to refer us to someone they know. Referrals are the best compliment we can receive and it gives us confidence that we are meeting your goals and expectations. We are happy to meet with anyone who may benefit from our services and will provide everyone with the same custom services we provide our current clients.
Tchabushnig Wealth Group.
This communication has been prepared by Alan Tchabushnig and expresses the opinions of the authors and not necessarily those of Raymond James Ltd. (RJL). Statistics, factual data and other information are from sources RJL believes to be reliable but their accuracy cannot be guaranteed. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. It is intended for distribution only in those jurisdictions where RJL and the author are registered. Securities-related products and services are offered through Raymond James Ltd., member - Canadian Investor Protection Fund. Insurance products and services are offered through Raymond James Financial Planning Ltd., which is not a member - Canadian Investor Protection Fund.