An article published by the Wall Street Journal shared some fitting advice from endurance athletes, suggesting that those who endure adversity can emerge stronger and more resilient in what is termed “post-traumatic growth.”* As we enter another year, may we continue to have hope that brighter days lie ahead and we will return to a world not bound by the dominance of the pandemic. Over the past 20 months, we’ve each had to endure adversity in our own ways. However, the hope is that we will be able to move forward, perhaps a little bit more resilient than before.

These lessons in resilience may be helpful in supporting the investing journey. The pandemic has created new challenges for economies and financial markets: growing levels of government debt, ongoing supply chain issues, the likelihood of rate increases by central banks and persistent inflation. Keeping balanced expectations may be made more difficult given the uncertainties.

It is instructive that even in the face of such unprecedented times, last year’s equity market performance was strong. This should remind us that sitting on the sidelines is not a prescription for growth. If we are to prepare for the financial future we want, we must continue to move forward.

We should also never underestimate the capacity of companies, economies and the markets to persist and advance. This past earnings season is one such reminder. Many companies continued to post strong earnings despite unprecedented conditions — partial economic shutdowns, labour shortages, supply chain issues and rising input costs — and some at record levels.

As a testament to this endurance, market strategist Ed Yardeni recently published a series of data that shows how the world has generated unimaginable wealth since the 1940s.** Of particular note is the tremendous growth in corporate profits — an upward trajectory over time, despite many short-term setbacks. Even during the global financial crisis of 2008-09, when a deviation occurred, it is notable how quickly this reverted to continue to climb higher.

Market uncertainties will always be with us in some form or another. However, portfolios built on a solid foundation, using securities selected with quality, diversification, strategic asset allocation and individual needs in mind, will often prove to be enduring within the ever-changing investing landscape.

In looking forward, let’s expect the best, knowing that we have this plan in place to guide our investing. Here’s to much hope, health, happiness and prosperity for 2022 and beyond!

The views expressed are those of Wes Ashton, Director of Growth Strategy and Portfolio Manager, and not necessarily those of Harbourfront Wealth Management Inc., a member of the Canadian Investor Protection Fund.

*“Hard Earned Lessons in Endurance,” Bonds Bernstein, Wall Street Journal, May 5, 2021
**
www.yardeni.com/pub/sp500marginnipa.pdf

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