Lessons Learned in 2021
Yet another year has gone by and you have heard it said “The more things change, the more they stay the same”. Who would have thought a year ago that we would still be talking about lockdowns, no travel and children learning from home. This year was filled with ups and downs, but as always, we can take these lessons and apply them in the New Year moving forward. As we leap into 2022, here are a few things that 2021 taught us.
COVID-19, When Will It End?
It has almost been two years since the pandemic took over our lives and caused extreme economic downturns and some of the most rapid market declines and advances in our history. Earlier this year, it seemed like the world was on track to get back to our normal. The real question to be asked was “What even is normal anymore?” But then, the Delta variant arrived which yet again created volatility in the stock market. Just as the third booster shots became available, earlier in December the Omicron variant rattled the markets and left many investors worried. If we have learned one thing this year, as markets decline, they seem to bounce right back and hit all time highs again. Many of those who were unable to stomach the ups and downs of the financial markets, ran for the hills and missed out on the continued market gains throughout the year. Over time you need to be willing to take some of this volatility risk to be able to create wealth for you and your generations to come.
Inflation Has Raised its Head
Have you bought/rented a house, bought food, filled up for gas, or shopped for some Christmas presents and been taken aback by the price increases? The Consumer Price Index (CPI) rose 4.7% in October compared to last year, which is up from 4.4% in September and the largest gain since February 2003. This demonstrates that we need to be prepared for continued price increases and re-adjust our financial goals and budget to match this economic rise. More importantly, with this rise in prices we need to invest in a manner that can match or exceed these price increases. Stocks over time are the only asset class that we provide this inflation protection and keep your purchasing power.
Taking Care of Yourself Remains A Priority
An important lesson that this year has taught us is to never forget to take care of our physical, mental, emotional, and spiritual wellbeing. Finances play a significant role in our lives and for us to achieve our personal finance goals, we need to carve time out to take care of ourselves. Finding a balance between our personal and professional lives will continue to be a priority this New Year.
Look At Past Trends And Set Your Goals
Whether this year was prosperous for you or a challenge, you can achieve financial independence with the right tools. This year taught us that amid a chaotic COVID storm, if you have the means to take some risk and are prepared for the markets to rise and fall, you will be that much closer to your long-term financial goals. Take everything that you learned this year, both success and failure and incorporate it into your wealth strategy.
As much as we wish we had the answers to every problem, remind yourself that you can only focus on one step at a time. It is no secret that the pandemic and inflation will continue to lurk in the shadows but for now it is all about continuing to work your wealth plan together to meet your goals as we adjust to the current landscape. 2022, here we come!
CPI Information source – https://www150.statcan.gc.ca/n1/daily-quotidien/211117/dq211117a-eng.htm
Written by Duane Francis
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