Insights and Strategies
2022 – The Year of The Curve Ball
It’s usually at this time of year when many of us begin to reflect on the past year and start to put together a list of new goals/desired behaviours for the upcoming one. This reflection process is not only a great opportunity to look back on the many successes or achievements from the past year, but it’s also an opportunity to hit the reset/recalibrate button on some of the goals that may not have been achieved during the year. In most cases, either the list of goals was doomed from the very start (e.g., not specific enough) while in other cases, the unexpected happened (e.g., new job, a new addition to the family, etc.), hindering one’s ability to achieve their newly set goals.
But as we all know, when it comes to setting any type of goals, especially ambitious ones at the start of the year, there is always the possibility that life can throw a few curve balls and derail one’s plans. However, unlike in the game of baseball, where balls are thrown one at a time from a pitcher directly in front of a batter, life can often feel like several curve balls are being thrown at us simultaneously from all directions. This was especially true in 2022, as global equity, bond and commodity markets all struggled to find a clear direction throughout much of the year, only to end the year mostly in the red. The Russian invasion of Ukraine and the continuation of zero-COVID policies in China added to the flurry of unexpected events in 2022.
Unfortunately, we continue to expect another challenging year ahead for investors in 2023. But rather than trying to anticipate and/or avoid all the curve balls, we suggest investors position portfolios to withstand the unexpected – more on this below.
2022 Curve Balls: 40-year High Inflation, the Russian Invasion of Ukraine, Zero-COVID in China, a Hawkish BoC, etc.
To state the obvious, the upbeat narrative at the beginning of 2022 for the Canadian economy changed quite meaningfully as the year progressed to a more cautious one. Economic and market fundamentals all continued to weaken into year-end, as the many unexpected curve balls became unavoidable and weighed on the Canadian economy/markets and consumers.