January 2022 - Monthly Update
Kaitlyn Richardson - Jan 01, 2023
Trust this note finds you well as we zoom into 2023.
Your portfolio was down in December and shows a small decline over the past twelve months.
For some context, your portfolio was much more stable and consistent than investment markets around the world. Less than half of your previous year's gains were unwound.
The last twelve months contained numerous events that negatively affected investment markets. These events began in the first quarter with a return of accelerating inflation, interest rate hikes as well as European conflict.
Zero percent interest were never to last. The course of last year saw interest rates normalize back up to 4%. In a more normal rate environment, your investment portfolio earns more. This is similar to what was experienced five years ago. For families that are committed to saving, this is a big win.
Today, higher interest rates are intended to bring down price inflation by slowing the pace of growth in an economy. In a slowing or bottoming economic cycle it is best to invest in profitable, high quality businesses (via their stocks and/or bonds) – this is exactly what you own.
Now that the world has greater experience with the trends of the past year - their effect on investment markets is more moderate. For us as investors, this means that markets are getting back to reflecting the fundamentals of strong businesses and their future prospects. These businesses create economic value every day and are worth more in the future as a result.
Over the past 15 years, North American markets experience three or more years of growth for every year of decline. With 2022 now behind us, we can be realistic in our expectations for growth now and in the future.
The view from Brian Belski, BMO’s Chief Investment Strategist:
Stocks in your portfolio that made a new 52 week high this past month:
Bristol-Myers Squibb*, Canadian National Rail*
Stocks in your portfolio that made a new 52 week low this past month:
The Loonie gained half a cent versus the U.S. dollar to:
Thank you and all our best,
Ian, Gab, Kaitlyn & Nataliia