A look back and a look forward – 2021

Ryan M Dec 21, 2021
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While 2021 may not have ended up being the ‘reopening party’ we all had hoped, it is nice to close out the current year with a far more optimistic tone than in 2020. Of course, this year had its own challenges and transitions as a cloud, albeit fading, continues to loom overhead around virus concerns. Meanwhile, many people have taken time to re-evaluate what is important from a personal and career perspective. This introspection probably means continued ‘disruption’ in certain areas for the next year, but this is probably a good thing on a net basis. Of course, with large changes in trends or outlooks comes opportunities both at the personal level but also at the investment level and this is what we think has been a big theme for the past year in markets: Understanding what a post-Covid world looks like.

 

For better or worse, it is probably too early to tell how everything will shake out once we get ‘through’ Covid. Many of the themes such as work from home vs office, inflation, and reopening trades continue to have a back-and-forth battle in the markets on almost a monthly basis. So even the markets are having trouble understanding how things will look going forward. The answer for most of these ‘themes’ is probably a less exciting ‘something in the middle’. Some will work from home, some will go to the office and even more will do both. Some companies will benefit from changes in tastes while others will lose out. We think the key is that even if at the margins, there will be some change and therein lies opportunity!

 

At the market level, this has been one of the better years we have seen on the TSX for a long time, with the index up 21% year-to-date as we write this. The S&P 500 has followed suit as well, up 24.6% year-to-date. Hidden in these strong numbers is a lot of volatility and round trips we saw in various themes/sectors/stocks. Looking at the returns at face value does not do justice to some of the craziness we saw this year. Here are just a handful of what we might call mini-bubbles that we saw in 2021:

  • Meme stocks
  • SPACs
  • Commodities
  • Supply-chain companies (shipping, containers)
  • Oil round trip
  • Real estate
  • Crypto (Tokens, NFTs, currencies, you name it!)

 

Looking forward, while it feels like some of these oddities are maybe on their last legs, one thing we know for certain is that every year the markets have a new surprise to throw our way. This is why remaining diversified, focused on fundamentals, and doing ones best to not chase every hot theme can go a long way for long-term investing success.

 

While a busy year in the markets, it has also been a busy year at 5i Research!

We recently updated the look, feel and user experience of the website which we think has been a great upgrade to the service. As always, we continue to update and adjust features so comments on changes members would like are always welcome. Feel free to send us a message through the Q&A and let us know what features you would like to see.

 

We have added team members over the last 12 months and can confidently say that our ‘bench’ is stronger than it ever has been!

 

We also did a very big update to the website at Canadian MoneySaver and we are biased but we think it looks beautiful! If you haven’t seen the new site yet, we encourage you to check it out here.

Every year the one thing that always amazes us is the evolution of our membership. Through feedback and comments over the years we can see how so many have evolved over the years, learned and improved on their investing acumen. This showed through the most during the depths of Covid when so many were balanced and logical in what was a stressful period from a financial and personal point of view. So, our members should give themselves a pat on the back as well because investing isn’t always easy and there is always something new to learn.

One final request over the holidays is that you tell a friend about 5i Research. Word of mouth has been our greatest source of members over the years and we have a low friction (no credit card required) free trial that those who might be interested can utilize here. Please feel free to send it to a friend.

I always like to close these out with a big thank you to our members. We can’t believe we are rounding out our 10th year of operations. We hope everyone has learned a lot and had a bit of fun over the last decade with us. We certainly have. Here’s to the next decade!

Wishing You and Your Loved Ones a Happy Holiday Season,

Ryan's Signature

 

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