|What Worked in 2021||What Didn't in 2021|
|Energy Stocks||Emerging Market Stocks|
|Technology Stocks||Cannabis Stocks|
|Equity Markets||Fourth Quarter % Change (in Cdn$)||Calendar Year 2021|
|Bond Markets||Fourth Quarter % Change (in Cdn$)% Change (in Cdn$)||Calendar Year 2021 % Change (in Cdn$)% Change (in Cdn$)|
|REFINITIV Overall Bond Index||1.1%||-2.9%|
Well, another year has passed. And what a year it was! If 2020 was the year of Covid, 2021 was supposed to be the year of more normal. Instead, we got Covid variants, supply chain disruptions and high inflation (especially compared to recent history). Despite these challenges, when we look back at markets, it was a solid year for stocks in many countries, and in our client portfolios. While we watched from the sidelines, speculation was also alive and well in 2021. Speculative stocks like Gamestop and AMC were up over 7-fold and 12-fold respectively in 2021 and were up much higher at different points during the year. Many speculative stocks have come down since their early 2021 highs but still trade at very high valuations. Speculation wasn’t just limited to the stock market. Cryptocurrencies, like Dogecoin, which started as a joke in 2013, multiplied in value several-fold in 2021. There were also non-fungible tokens (NFTs), another area of speculative excess. We wonder what new speculative areas we will see in 2022.
On the economic front, we have had strong labour markets in both Canada and the U.S. We have also had higher inflation numbers than in recent years. One of us overheard a conversation between a mother and son with the young son asking: “Can you please give me some money so I can buy something?” The mother gave her son a five-dollar bill. The son responded: “You can’t buy anything with this!” Even youngsters understand inflation. With rising employment and inflation numbers, central banks around the world have started to signal the end of their stimulus programs and the beginning of interest rate increases. As investors, we have seen periods of both low and high inflation and are constantly assessing our portfolios for this risk.
This is also the time for predictions of what the new year will bring. Similarly to you, we have seen the various forecasts. However, we will refrain from making any large-scale forecasts and will continue to focus on selecting investments with appropriate rewards for the risks we are taking. We will also focus on asset allocation. A mundane approach for sure. But that’s what successful investing is all about. When we look at our portfolios, we believe they are in a good position to benefit from a return to a more traditional investing environment going forward.
Moving from the markets to Portfolio Management Corporation, we are thrilled to announce that Joan Smart has joined us as Vice President. Joan will be working in a variety of areas across the firm including software system conversion, client service, compliance, investments and special projects. Joan brings a variety of talents and skills to our firm. She has significant investment, financial, entrepreneurial and leadership experience. A brief bio is below:
- Joan most recently served for almost three years as Vice President Finance and Operations at the Canadian Foundation for AIDS Research.
- In 2018, Joan returned to Toronto after twenty plus years working/living in Cleveland, Ohio. Joan worked in a high-net-worth family office in Gates Mills, Ohio where she managed the family’s finances. In this role, she interacted regularly with lawyers for estate planning, contracts and for the family foundation; accountants for tax planning; and fiduciaries such as banks and private wealth managers.
- Prior to this role, her eighteen years in the investment business provided the sales and analytical skills needed to start her own energy-saving business dealership, Smart Energy Systems in Cleveland in 2004.
Please feel free to reach out to us if you have any questions.
We want to thank all of you for being our clients as well as for referring new business to us. We appreciate the trust you have placed in us as we keep it front and centre each, and every day.
We wish all of you a healthy and prosperous 2022!
|Fixed Income||December 2021||December 2020|
|Cdn 91 day T-Bills||0.16%||0.12%|
|U.S. 91 day T-Bills||0.09%||0.10%|
|Cdn 10 year Bond||1.45%||0.70%|
|U.S. 10 year Bond||1.52%||0.93%|
|Commodities (in U.S.$)||December 2021||December 2020|
|Currency||December 2021||December 2020|