2020 may have been a challenging year, but through any challenge, we become stronger.
I wanted to share a short video greeting with you to personally give a Point B Financial Update.
2020 will go down as one for the history books. The first quarter reported a mysterious virus which quickly turned into a pandemic, global shutdown and the worst economic crisis since the Great Depression. And yet, by the end of the year, markets had recovered beyond expectations.
In March, all eyes were on the markets as they were falling. Every economic downturn in history has led to an upturn, and this time was no different – except perhaps the speed at which the drop and rebound occurred. Your managers saw these dips as great opportunities to grow long term wealth. The old adage “BUY LOW, SELL HIGH” holds true today, and your managers are using this volatility to make significant positive impacts on your portfolios.
For investors, the best opportunity occurs when equities fall significantly from their peaks, and this proved true again last year in terms of returns from the bottom. While that ideal bottom of the market investment opportunity has passed, we’re still optimistic about the year ahead. There’s reason to believe that the economic environment in Canada, the U.S. and internationally will be much improved from 2020. A few points worth noting:
- Coronavirus. Areas of Canada and the U.S., along with several European nations, are experiencing a second round of lockdown. However, there’s far less uncertainty this time around. We know what to expect and we know it works. There’s also light at the end of the tunnel as vaccines are continuing to roll out in several countries.
- Canadian dollar. We believe the CAD will continue to rise relative to the U.S. dollar (USD). As oil prices continue to trend higher, we anticipate the loonie trading at US$0.79 over the course of the next 6–12 months.
- Inflation. Prices will continue to rise in 2021, however, central banks will likely keep interest rates low until well into 2022.
This is not a time to sit on the sidelines, but a time to make calculated investment decisions. If the markets do pull back at some point early in 2021, remember what happened last year and be ready to take advantage of any investment opportunities.
As always, the Point B Financial team is here to support you every step of the way. Thank you for your continued business and trust. We work hard to earn this everyday.
All the best in 2021!