Volatility Ahead

What is Whipsaw?
by Shelly Appleton-Benko | May 12, 2022

Why is it that everything that is good for you, is often also painful? Exercising, eating healthy, paying taxes and, of course, riding out market corrections. Yes, you heard me correctly: market corrections are healthy and can be good for you over the long term. Equity markets are designed to balance between risk and reward. In 2020 and 2021, the scales were tipped in one direction only: up. At that time, reviewing our monthly statements was satisfying and not painful at all.

However, too much of a good thing is not a good thing. It is important to note that companies don’t grow their earnings by 20% in one year under normal conditions. So, why have we come to expect these type of returns? Houses should not increase in value by that margin either, yet many homeowners are anxiously opening their property assessments in anticipation of their net worth going up, without having done anything to contribute towards it.

Let’s return to the question in the title of this note, “What is whipsaw?” A trader is considered to be “whipsawed” when the price of a security they have just invested in abruptly moves in the opposite, and unexpected, direction. Whipsaw patterns most notably occur in a volatile market in which price fluctuations are unpredictable – similar to the circumstances we find ourselves in now.

The current market volatility is unnerving, and leaves us with many unanswered questions. The exact answers are unknown, and that is why the ups and downs of this market may seem particularly painful. However, we need to adjust our expectations and understand that 2022 has become the year of change. We all listened to the experts who told us that markets were frothy and inflation was coming. Today, we are faced with a changing investment environment that creates opportunity. The timing of these opportunities is currently unknown, but it’s important to remember that they always come around. History has shown us that patience is not only a virtue, but also a key attribute that successful investors embrace. The scales take time to rebalance, and now is the time to exercise patience.

Inflation and Interest Rates Are Leading the Race
by Shelly Appleton-Benko | May 3, 2022

StormDark and stormy is great if you are a cocktail, but not so great if you are the stock market.

The recent headlines regarding more COVID-19 lockdowns in China, as well as inflationary pressures caused by higher energy prices and the war in Ukraine, have caused a few storm clouds and a fair amount of uncertainty in the markets. We would like to think that the U.S. Federal Reserve (Fed) will make appropriate moves to control the inflated prices in a timely manner in order to curb price increases, but we have to ask ourselves, “Is this the end of the lower-rate era?”

Although rates are scheduled to rise, we do feel that the Fed and the Bank of Canada will control the pressure of the increases, which in turn will assist in the inflationary pressure of prices. If the prices continue to rise, the rates will also continue to rise to prevent inflation from running out of control.

The supply chain shortage is an additional factor that could extend the pain of the current situation for the foreseeable future. We are also in the middle of earnings season, which will perhaps forecast what the summer months will bring to the markets. Regardless of the pace of these rate changes, many companies are preparing for price increases, and making changes to improve their overall profitability during these uncertain times. This means that investors have to adjust their expectations for market returns, and even more so for returns on fixed income products. We are coming off a couple of fantastic performance years, but this is a powerful reminder that we are entering a slow-growth environment. Remember, the stock market is forward-looking, and the near future looks a little dark and stormy.

However, we know that historically during uncertain times in the markets, investors have found opportunities, regardless of the turmoil. Is it time to sit back and wait out the storm, or make adjustments? The answer is different for everyone.

If you have questions or would like to discuss your investments, please reach out anytime; we are here to help.

Further reading: Why the Federal Reserve has made a historical mistake on inflation

Inspiring Women
by Shelly Appleton-Benko | March 8, 2022

Inspiring Women

Almost every day, I am reminded of how lucky I am to work with the women of STM Wealth Management. When asked about the women whom I would like to extend my gratitude to in honour of International Women’s Day, my thoughts led directly back to them. These ladies are my sisters, my partners and my squad. We’ve stuck together through a pandemic, economic breakdowns, inventory shortages and family crises. We have laughed, cried and shared success along the way.

Not only are they innovative and proactive, they literally are there with a casserole on your porch when you need it the most. In moments of struggle, I just close my eyes and their words of encouragement are the loudest in my head, always. May they continue to inspire the new generation, their families, daughters and other women in our world - with the same grace, intelligence and kindness, they bring each and every day as my colleagues at Odlum Brown. 

Happy Family Day!
by Shelly Appleton-Benko | February 18, 2022

Family Day 2022

by Shelly Appleton-Benko | February 2, 2022

22Today is February 2, 2022 – or 2/2/22.

I took note of this, as my favourite number is 22. Those of you who know me a little more personally know that it represents many special things in my life: birthdays, my anniversary and my favourite jersey number, to name a few! Furthermore, the number 22 in numerology represents a “master builder.” So I believe that 2022 will be a pinnacle year for the world as we try and maneuver through the seemingly never-ending pandemic. That said, there are plenty of economic challenges at present, and corporations are muddling through the constant restrictions, talent shortages, supply chain issues and, yes, even the inflationary pressure that is on the horizon.

A wise person once told me to concentrate on the things that I can control, and to dedicate my knowledge and skills to ensuring the outcomes of those items are the best that they can be. Since we have no control over the outcomes of the aforementioned challenges, in 2022, I will continue to focus on what I can change to achieve the best outcome for our clients: building portfolios that are resilient, strong and even more diversified than ever before. Volatility will always be a factor in the market, and it is important to address what level of risk we can all manage. However with a solidly built mix, portfolios are more likely to stand the test of time – through 2022 and beyond.

Happy Lunar New Year!
by Shelly Appleton-Benko | February 1, 2022

What does financial planning mean to you?
by Shelly Appleton-Benko | January 18, 2022

What is Financial Planning

Whether it’s because many folks are making resolutions at this time of the year, or simply the desire to get life back to some kind of normalcy, looking to the future and making plans can often be a mindful and healthy step in the right direction. 

Consider creating a formal financial plan.* It’s more than just a summary of your investments; it’s a snapshot of where your finances are currently, where you are heading and factors that may affect your journey along the way. It provides a look at both the accumulation and dispersion of funds throughout your lifetime and beyond.

If you already have a plan, take a look to see if you are on track or ahead of schedule? Have you experienced any major life changes that may modify your initial thoughts or direction? Or perhaps you aren’t quite at the stage of starting to plan yet, as there are many components to consider. When the time is right, give us a call, and together with our team of specialists with Odlum Brown Financial Services Limited, we can help you get started. Bring on 2022!

*Available through Odlum Brown Financial Services Limited, a wholly owned subsidiary of Odlum Brown Limited offering life insurance products, retirement, estate and financial planning exclusively to Odlum Brown clients.

2021: Below the Surface
by Shelly Appleton-Benko | January 7, 2022

What a year 2021 was for the markets! Attached is a quick look at some key factors that played a role in the excellent returns, despite the effects of the pandemic. Why are portfolios doing so well during this difficult time? What does the future have in store as we look forward to the economic recovery ahead?

Click the graphic to take a look at our 2021 Year in Review: