4. The markets’ response: down and up
Because it turned clear the central banks had been dedicated to slowing the economic system with fee hikes, the markets began their descent. We hit the underside in the direction of the top of June. It was the worst six months of the yr since 1970.
July marked the beginning of an upward swing regardless of dips within the latter half of August and September.
October and November have confirmed to be a few of the finest months ever for the markets, returning portfolios to a constructive for the second half of the yr. In December, the markets began flat to barely destructive.
Hopefully, the markets will rally to complete off the yr to conclude on a constructive observe, as buyers began to regain what they misplaced through the disastrous first half of the yr.
5. COVID continues to have an effect on the markets
Although Canada is now not working underneath a pandemic, the results are nonetheless taking part in out within the labour market. Many Canadians didn’t return to their jobs after the preliminary lockdowns, and lots of need to maintain working from residence. It’s going to take a very long time to fill the employee scarcity that companies are nonetheless making an attempt to handle.
6. Tech takes it on the chin—purchase now
At any time when rates of interest rise, it’s hassle for the tech trade. When financial development stalls, tech stalls. That’s why we noticed huge job cuts within the sector in 2022. Crunchbase Information stories greater than 88,000 layoffs within the U.S. tech house alone. That mentioned, If any sector goes to supply the expansion wanted to cowl inflation charges of seven%, 8%, 9%, it’s tech. A utility paying a 4% dividend will not be going to assist you to sustain with the price of dwelling.
For Canadian buyers, tech will be the place to go proper now. Inventory costs are decrease, and that is the place the bounce-back will seemingly rebound from. Microsoft, Amazon and Alphabet are all down double digits. Go to the place the values are at the moment and you can be rewarded when the economic system features momentum.
7. The 2022 Crypto crash(es)
Digital currencies misplaced USD$2 trillion in 2022. Whereas the blockchain know-how behind the foreign money is right here to remain—and I believe there will likely be some digital currencies that survive the insanity—my recommendation to anybody who needs to take a position is to be cautious. Take a really small place in your portfolio. It’s nonetheless not totally regulated—neither is it backed by a authorities, financial institution, or something actually, which implies buyers are within the wild west.