2022
Podcast: What do marshmallows and markets have in common?
We’re nearing the end of the 2022.
In terms of your portfolio, that’s probably a good thing.
As of writing, the S&P 500 is down 23.1% year-to-date. That’s the worst this index has performed in a calendar year since the financial crisis of 2008.
Instead of breaking down what’s happened (which we’ve done on a few occasions already), let’s talk about what lies ahead.
We were pleased to be joined by first-time guest Peter Hofstra (Senior VP and Senior Portfolio Manager, CI GAM) to talk about what his team is seeing in terms of market outlooks for the rest of 2022 and heading into 2023.
Have we hit the bottom already? What does Peter mean by eliminating the behaviour gap? And why does he keep talking about marshmallows?
Peter did a fantastic job of simplifying the complexity of our economy in this 20-minute episode.
You can listen to the podcast via these avenues.
Or, you can check out the video podcast below.
Here are some highlights from the episode.
Investing Psychology 101
We all love a good sale…except when it comes to stocks.
Why is that?
Well, it’s in the psychology of owning stocks, according to Peter.
It also relates to the behaviour gap. You might have heard Josh or myself bring this up in meetings before, but this is often where investors see a decrease in their returns because emotions get in the way.
However, this singular quote from Peter in the clip below stands out…
“You make more money in equities, because it can be harder.”
The Marshmallow Test
So, what is the marshmallow test, and how does it relate to investing?
According to Peter, it’s all about delayed gratification.
More on that below.
What businesses should investors target?
As one of the top Senior Portfolio Managers at CI Global Asset Management, Peter knows a thing or two about which companies his team of active managers should be targeting.
So, which companies look attractive right now in this high inflationary, high interest rate environment?
Peter gives some quick thoughts on that here.
Why Canada raised (and will stop raising) rates first
Back in March, both Canada and the United States raised interest rates from 0.25% to 0.5%. However, Canada was first to do, raising rates about two weeks before the States followed suit.
That’s exactly what Peter and his team predicted would happen. They also believe, like many, that Canada will end rate hikes before the States does.
Why exactly is that? Peter gives a high-level answer in the clip below.
Where is the bottom?
The short answer is…no one knows.
It’s silly, and dangerous to bet on where the bottom of the market is. Our past guest Drummond Brodeur (Senior VP & Global Strategist, CI GAM) wrote about the consequences of doing so recently.
With that disclaimer out of the way, if you’re looking for a well-educated guess on when the market might bottom out, Peter is certainly a qualified person worth listening to.
Here’s his take on when we might be at the bottom of the market, and a quick rationale behind his answer.
Next Episode
For a few different reasons, the end of the year is historically where we see the bulk of charitable donations.
According to Canada Helps, about 40% of donations they see come through in the final two months of the year.
With the end of 2022 fast approaching, I wanted to touch on things you should know about charitable giving on the next episode of the Wealth Wisdom Podcast.
Josh Dyck (founding partner, Sana Family Office) and I will join forces next time to discuss some of the most popular avenues for charitable giving, including planned giving, Donor-Advised Funds and more.
Until next time,
Assante Sana
John Lawson (Senior Wealth Advisor, CFP®, CIM®, FEA)
Sana Family Office | Assante Capital Management Ltd.
