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The end of March 2022, and spring is on its way... It is so easy to forget on these first warm days that winter often doesn't leave all at once. The odd blast of snow, fog and ice remind us of winter's strength. However, we all know that this time it won't last; the days are longer, the sun stronger and soon spring will have fully arrived.
As the final snowbanks melt and we get (hopefully) some spring showers to lead us into the warmer days, we start to think about new growth, new beginnings and the fruitful summer ahead. After a very difficult past couple of years, thoughts toward new beginnings are very refreshing. Although we are reminded on a daily basis of the troubles still in the world, the change in the weather tells us all that somethings are bigger than the immediate, and that this too shall pass.
Springtime is a big thing in our family, as you know my kids are ball players and baseball/softball is all encompassing in our household once the snow is gone. Unfortunately, my daughter is recovering from an injury and her season is doubtful. We are excited that our son is about to play his final year of 18U AAA Baseball with the Red Deer Braves, and may get into the odd game with the men's Red Deer Riggers, before he moves on to college ball at the University of Jamestown in North Dakota in the fall. We are so excited to see him play again after a long recovery from ACL repair surgery. To share our love of baseball with the LifeLegacy family and to connect with you in a more social atmosphere, we are hosting a Sunday afternoon at a Sylvan Lake Gulls game this June.
Full details are yet to be confirmed and will be communicated shortly.
If would like to reserve your spot to join us you can complete this form Gulls Game Jun 2022
Quarter 1 2022 - Comments
The start of 2022 has brought a lot of volatility to the investment markets. The markets were digesting the potential for the pandemic to be over and a return to normal economic activities like returning to work, opening of borders and a release of pent-up consumer demand. Central banks were concerned with inflation and communicating that they would be raising interest rates and cutting back on liquidity. Bond markets were impacted by the projected increase in rates, and commodity prices continued to rise based on increase economic activity. Players in the stock markets were starting to turn from exposure to technology and healthcare to more economically sensitive sectors like material, resources and financials. If the economy was moving towards "real" activities from the virtual world we have been in for the past couple of years, economically sensitive stocks would be well positioned for continued growth.
However, that story didn't really get to play out. Russia's invasion of Ukraine has moved the focus towards energy and food security for not only Europe, but most of the world. Even against a backdrop of policies dedicated to becoming carbon neutral, the world has realized that we are still very dependent on oil and natural gas.
Spring is the planting season and Ukraine is a major supplier of wheat and other grains to much of the world. The next few weeks will determine if that crop gets planted. We have already seen a huge increase in the futures prices for wheat, canola and barley. This unfortunately also has coincided with an increase price of fertilizers and fuel. Is farming ever easy?
We have already seen a greater focus on where the world gets its energy and foodstuffs. Policies are just starting to be reviewed on how potentially Canada and the US (both relatively stable, secure and environmentally sustainable) can play a greater role in providing energy and food to the world, so that there is less reliance on markets such as Russia. Major policy changes do not happen overnight, nor do solutions (like pipelines and LNG plants) get created in an instant. Canada may be well positioned to take a greater role going forward, we will wait and see.
As far as your investment portfolio goes, in discussions with Fiduciary Trust they have told me they have been very active to preserve value in these uncertain times and are looking for ways to protect portfolios from the downside but also position for longer term growth. They have been reducing exposure to Europe, as the short term risk is higher than they would like, and have been increasing exposure to Canada and infrastructure opportunities. Bonds have been volatile due to interest rate expectations, but may have priced in higher rates than what we may see. We have seen negative results in the first quarter of 2022 in most markets, but the portfolios are well positioned to preserve capital and take advantage of market recoveries. We invite you to visit www.fiduciarytrust.ca/en-ca-ftci/insights/ for the latest commentaries. If you would like to discuss your portfolio with the managers please give me a call or schedule a review with Scott or with Stephen.
We look forward to connecting with you for a portfolio review or an update to your financial plan. If you have any questions please reach out, we would be happy to chat 403-341-5899.
Sincerely,
Ed
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