Blog Layout

Market Update April 2022

Laura Chanin • Apr 21, 2022
It’s been a challenging year so far for investors. There hasn’t been just one theme that has contributed to the weak performance to start the year but many. At the start of 2022, the conversations were around ‘what is the pace in which global central banks’ would increase interest rates. This has transitioned into the impact of the Russia-Ukraine war and now has moved on to ‘whether the odds of a recession have increased.’

As well as continued concerns about inflation and still some supply chain issues. All of the uncertainty contributes to volatility.

How did stocks do this quarter?

The S&P 500 (US market) ended the quarter at -4.9% although at one point was down -12.5%. The MSCI Europe and MSCI EAFE (Europe, Asia, Far East) also struggled, with returns of -5.9% and -6.6% respectively.
The Canadian market (S&P/TSX) fared better, ending with a gain of 3.1% mainly on the back of stronger oil and commodity prices.
Bonds are also struggling as they are tied to interest rates. But they are good to hold for diversification and protection.

Here is some commentary from Manulife’s chief Investment team:

As the year progresses, we continue to believe that the Fed will raise interest rates less than the 6,7,8 times that’s currently being priced in and that Russia-Ukraine tensions will eventually ease, leading to a pivot in the negative narrative that has unfolded since the start of the year. Over the next few months, the geopolitical premium built into oil prices today will likely begin to decline, but supply-and-demand dynamics will continue to support oil prices above US$90 a barrel as global economies continue to fully reopen leading into the summer and production remains limited. 

A change toward a less hawkish sentiment coupled with a good (although weaker) fundamental backdrop provides a positive path forward for equity returns. The key to success in investing is to stay focused on what matters and understand the environment so that you can adjust to the changes if necessary.

With regard to a recession, economic growth forecasts have been revising lowered but are still expected to be 4% growth over the next year. Dynamic’s chief Investment Strategist Myles Zylock doesn’t see imminent risk in the next 12 to 18 months. His comments include that there is a movement towards more quality companies i.e. those with continued profitability, reliability of their cash flows, and a strong balance sheet i.e. more assets than debt.

Historically the impact of war on equities is temporary. Investing is a long game, so best to stay the course and remain diversified. You win by preparing and not reacting.

Please let me know if you’d like to talk further.

 

Source: https://www.manulifeim.com
By Kelsey Maxwell 20 Mar, 2024
March Fraud Awareness Month
By Laura Chanin 20 Mar, 2024
Protecting your gifted down payment for your kids
By Kelsey Maxwell 20 Mar, 2024
Did you know that 1.7 million Canadians are expected to be living with dementia by 2050?
By Kelsey Maxwell 20 Mar, 2024
The Benefits of Yoga as We Age
By Laura Chanin 20 Mar, 2024
What are the 5 big banks predicting for interest rate cuts for 2024?
By Laura Chanin 20 Feb, 2024
The S&P 500 Just Crossed 5,000. What’s Next?
By Kelsey Maxwell 15 Feb, 2024
Did you know all of your Client Documents are available for you in real time through our secure Client Portal? Our clients privacy and security is of utmost importance to us at Right Direction Financial. Our Client Portal is the most secure way to access everything you need, from tax forms, to your latest Retirement Projections. To assist in the set up and ease of use, we are now offering a Complimentary 15 minute Tutorial for our clients! If you're not set up, we encourage you to reach out for more information, or better yet, book an appointment with us directly! Click here to book a Tutorial.
By Kelsey Maxwell 15 Feb, 2024
Naturally, when we encounter delays or frustrations in your daily life, whether it's being stuck in traffic, waiting in line, or facing unexpected interruptions, it triggers a stress response. Missing a meeting due to circumstances beyond your control likely induces a sense of concern about inconveniencing others. However, dwelling on this doesn't serve you well, as it is ultimately outside of your control. In today's fast-paced world, excessive stress rarely contributes positively to your performance and can even jeopardize your health. To shed light on the physiology of stress responses and offer strategies for shifting from distress (bad stress) to eustress (good stress), let's focus on cortisol, commonly known as the "stress hormone." Cortisol, produced by the adrenal glands, ramps up the activity of vital organs such as the heart, lungs, and muscles, boosting your ability to function both mentally and physically at heightened levels. While this surge is advantageous in short bursts, such as during moments of adrenaline rush, prolonged exposure to elevated cortisol levels, as observed in chronic stress, can prove harmful. The complexity surrounding cortisol and its impact on health and performance arises from its dual role as both a necessary and potentially harmful hormone, depending on its concentration within your body. Let’s take a moment to understand the role cortisol plays in your health. Role of Cortisol: Often dubbed the "stress hormone," cortisol is synthesized by the adrenal glands and plays a pivotal role in various bodily functions, including metabolism regulation, blood sugar control, inflammation reduction, and memory formation. It's indispensable for coping with stress. Benefits of Optimal Cortisol Levels: In appropriate quantities, cortisol is essential for maintaining overall well-being and performance. It aids in preserving bodily equilibrium, furnishes the energy required to tackle stressors, and facilitates recovery following physical or mental strain. Challenges Associated with Low Cortisol Levels: Inadequate cortisol levels can lead to conditions like Addison's disease, characterized by symptoms such as fatigue, muscle weakness, weight loss, and diminished stress-coping abilities. Insufficient cortisol levels may impede effective responses to everyday stressors, thereby affecting overall health and performance. Adverse Effects of Excessive Cortisol Levels: Conversely, prolonged elevation of cortisol levels, often attributable to chronic stress, can be detrimental. It may precipitate conditions like Cushing's syndrome and is linked to various health issues such as hypertension, weight gain, sleep disturbances, and compromised immune function. Heightened cortisol levels can impair cognitive function, diminish muscle mass, and reduce bone density. Striving for Cortisol Balance: The key lies in maintaining an equilibrium. Managing stress through mindfulness practices, regular exercise, and ample sleep can aid in regulating cortisol levels. Recognizing that cortisol isn't inherently detrimental but rather necessitates balanced levels is pivotal for optimizing health and performance. The importance of cortisol balance is critical, and moderation is key. Cortisol, alongside adrenaline, surges into the bloodstream in response to stress, heightening the activity of organs and muscles. While advantageous in the short term, prolonged exposure to elevated cortisol levels can prove detrimental. Chronic stress, characterized by prolonged stress elevation, is associated with severe health implications. Research from Harvard Medical School underscores the contribution of chronic stress to health issues like hypertension, heart disease, diabetes, obesity, anxiety, and depression. The 2010 Stress in America Survey by the American Psychological Association revealed that 75% of individuals experience stress levels putting them at risk for chronic illnesses such as cardiovascular disease, diabetes, cancer, and depression. Five Tips for Optimizing and Balancing Stress/Cortisol Levels: Nature Therapy: Spending time amidst natural settings can lower cortisol levels, resting heart rate, and blood pressure. Nature's intricate patterns, such as those seen in leaves and the sky, confer inherent benefits to our well-being. Exposure to natural environments fosters stress reduction, as proposed by the "restoration theory," underscoring nature's stress-alleviating effects. Cold Showers: Concluding your morning routine with a brief blast of cold water can activate the body's "fight or flight" response, releasing cortisol and adrenaline, potentially bolstering immune function. Studies indicate that individuals incorporating cold showers into their regimen report fewer sick days, suggesting a temporary increase in immune activity. Smiling: Deliberate smiling can expedite cortisol level reduction, especially following stress-inducing activities such as public speaking. Moreover, smiling releases neurotransmitters like dopamine, endorphins, and serotonin, heightening feelings of happiness. Research indicates that intentional smiling post-stressful events accelerates cortisol reduction compared to other facial expressions, showcasing the direct influence of physical actions on stress levels and mood. Regular Exercise: Engaging in physical activity serves as a potent stress reliever, moderating cortisol levels while enhancing overall health. Opt for activities that resonate with you to ensure consistency. Chronic physical activity correlates with a more regulated cortisol response to stress over time, reflecting improved regulation of the hypothalamic-pituitary-adrenal (HPA) axis. While acute exercise may temporarily elevate cortisol levels, habitual exercise fosters a balanced and resilient HPA axis, potentially lowering baseline cortisol levels and augmenting stress management capabilities. Mindful Relaxation: Practices like meditation, yoga, and deep breathing exercises significantly mitigate stress and aid in cortisol level management. Mindfulness and meditation exert a profound influence on cortisol levels by modulating the hypothalamic-pituitary-adrenal (HPA) axis, the body's central stress response system. These practices activate the parasympathetic nervous system, often dubbed the "rest and digest" system, counteracting stress-induced activation of the sympathetic nervous system and HPA axis. During mindfulness and meditation, the production of corticotropin-releasing hormone (CRH) in the hypothalamus decreases, leading to reduced secretion of adrenocorticotropic hormone (ACTH) by the pituitary gland. Consequently, adrenal cortex stimulation diminishes, resulting in reduced cortisol production and release. Understanding and effectively managing stress (and thus cortisol) levels are imperative for maintaining optimal health. Simple lifestyle modifications can yield profound effects on stress levels and overall well-being. However, it's important to note that while these suggestions are beneficial, they do not substitute professional medical advice, particularly concerning stress-related health conditions. Source: https://mailchi.mp/thewellsgroup/can-taking-a-sauna-improve-my-health-performance-1251272?e=ce7c3b83aa
By Kelsey Maxwell 15 Feb, 2024
For most events in life, there’s a beginning, a middle and an end. Rationally, this is a simple thought to accept. In practice however, the end can feel uncomfortable, emotional, or even dreaded. Endings and change can feel sad or final. Sometimes endings can even feel like failure. However, dreading or avoiding endings could potentially rob us of possibilities for progress and growth. Endings are simply transitions, and life is guaranteed to be full of those. What if you reframed your thoughts around life transitions, or endings, to promote happiness and growth? Endings are a normal, inevitable, and important part of being alive — like graduations or the new year. Rather than feeling defeated by life's transitions, what if you focused on what you have learned and gained. Unfortunately, common attitudes toward endings – whether of relationships or careers – is much less sanguine. Everyone wants the movie-style “happy ending” of getting married or landing a dream job. However life doesn’t roll its credits after those high notes, and when careers or families don’t endure, nobody breaks out the champagne and party hats. Instead, it's often believed that these endings are tragic failures. By shifting your perspective, you could think of endings as a natural part of life. Graduating from high school, moving out of your childhood home, and graduating from college all entail an ending, which probably felt exciting and promising. I'm sure you can recall a time where you've felt ready to take on the challenges of the unknown. You likely viewed those life transitions as positive changes. However, between childhood and adulthood, you may have experienced a radical shift in your beliefs about the value of change. Standards of life-long stability in our relationships, marriages, homes, and careers are imposed on you. People often undertake strenuous, sometimes depleting, efforts to ensure continuity. But as any parent, Buddhist, or biologist will tell you, life is continuous change. Besides death and taxes, change is the one thing you can count on. You develop and change over the course of your life, reaching different stages, developing different perspectives, and becoming different physically, intellectually and emotionally. Dread of change is also, unintentionally, a rejection of progress. If nothing ever changes, then it can’t — and you can’t — get better. The tendency to make continuity the primary focus means you overlook the dividends of the serious investments of time, energy, self-control and brain power that you invest in relationships and careers over time. Hopefully, like children advancing grade to grade, you learn enough to prepare for the next stage in your life, as a friend, a partner, a parent or a worker. Instead of feeling like you've failed when a chapter ends, perhaps you could remember that feeling when you graduated, focusing on growth, rather than loss. Instead of being furious at the person or event that pushed you out into the world, perhaps you could embrace them as liberators, or mentors to whom you are grateful. After all, they taught you well, even when what you learned includes that the person or thing that you loved and hoped might last, is no longer right for you. And sometimes the most important change you can make is to remove yourself from an unfit situation. Even negative circumstances can bear important lessons about what to avoid in the future, and your own courage to escape and stand on your own. While endings can be painful, and a long-term relationship or job shouldn’t be ended lightly, many endings are likely to be part of your life. Embrace the inevitability of change that is life and view yourself as a graduate of the school of life. Rather than feeling defeated by the passing of any life stage, try focusing your energy on the opportunity ahead. As with each new year, every major life transition should be a time to think about what you have gained and celebrate your progress. As 2024 gets underway, I hope you resolve to embrace the endings in your life with grace, humor, and most of all, gratitude. Source: : https://www.psychologytoday.com/ca/blog/human-development-for-dummies/202401/the-joy-of-endings
By Kelsey Maxwell 15 Feb, 2024
Forget the Roses, Here are all the Tips for Aging in Place
More Posts
Share by: