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<<First Name>> welcome to your Fall Mindful Wealth Management Newsletter
I hope you and your loved ones are settling into the transition from the active lifestyles we lead in the summer months, into the slower, more structured patterns of the fall season.
As promised in my last update, I am including more investor education in this newsletter. I'm calling it: "What are they talking about?" and will feature financial literacy topics in my newsletters going forward.
2022 has been a tough year in the markets and for those who did not study Macro Economics, you're likely hearing a lot of economic terms that may or may not make any sense to you. It is my hope that this newsletter and those that follow will provide you with both knowledge and perspective so you can make better sense of changes in the market.
For me, the more educated I become, the more empowered I feel to make informed decisions. It's my goal to share that empowerment with you. In an effort to support your Financial Literacy I have added an Investor Education tab to my website. This month's financial literacy topic will be Inflation. Because everyone comes from different backgrounds when it comes to financial literacy, I'm starting with the basics and aim to build on these topics over time. I've chosen to start with Inflation because it's the inflation pressures caused by various elements of the COVID pandemic that have forced the central banks around the world to raise interest rates at an unusually fast pace. These rate increases have been the catalyst to this year's market volatility. Next month, I'll focus on Monetary Policy and Interest Rates to help tie the 2 topics together.
I've also started a monthly Spotify podcast playlist where I'm saving timely podcasts that I found particularly interesting during the past month. Some of the podcasts may be a little heavy on terminology, but if you're interested, give them a listen when you're driving in your car or doing housework. I think you'll find you understand the content more than you may expect. Worst case scenario, you can use them as a sleep aid :)
Topics you will find in today's newsletter:
Market Update from Manulife Investments | Inflation 101 | Timely Podcast Recommendations | Link to a timely SNL skit
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There's no shortage of doom and gloom in the news these days. As it pertains to recent market volatility, it's important to remember that regardless of the reason, market downturns are a temporary and necessary stage of any market cycle.
Fidelity portfolio manager, Mark Schmehl was interviewed on September 20th and highlighted some of the reasons why recessions are so important along with some of the opportunities he's seeing in the market as a result. You can click HERE to listen to his interview on Spotify.
As you'll read in the Manulife Investments Market up date below, here's a summary of what the market experts expect for the next 6-12 months:
- Slowed growth as inflationary pressures and higher interest rates work their way through the market.
- Central banks are likely to continue to raise rates in 2022 in both Canada and the US. Many believe the Bank of Canada will pause it's rate hikes by the end of 2022, while the US is expected to continue raising rates into early 2023.
- A mild recession is predicted in both Canada and the US in 2023
Although these predictions expectations may seem grim, it's important to keep in mind that prior the low interest rate environment that North America experienced in the post financial crisis era (2008- present) the Bank of Canada had a target overnight rate of 4% and a target inflation rate of 2%.
Returning to these neutral interest and inflation levels is not necessarily a bad thing. It's the unprecedented pace of the rate increases in 2022, as central banks try to combat high inflation, that is causing Canadians to feel the short term pain.
Lastly, it's important to note that it usually takes 18-24 months to see the full impact of interest rate changes as they work their way through the system. (Reference: Bank of Canada)
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What can we expect for the rest of 2022?
What had been expected was the start of the pivot in global central banks’ monetary policies from ultra-accommodative to tightening. What was unexpected was that the pivot and market expectations would be toward an ultra-restrictive monetary policy in the form of above-average interest rate increases.
READ ARTICLE ➠
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This month's Financial Literacy topic is Inflation.
As mentioned above, I want to start with the basics of financial literacy. For some, the videos below may be a helpful refresher, for others this may be new information. Below you will find 2 short videos (3 minutes or less) that provide a great explanation of what inflation is and more specifically, how we measure inflation in Canada through the Consumer Price Index (CPI).
For more information, go to the Investor Education Section of the Mindful Wealth Management Website. |
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What's up with inflation? [Video]
[Solutions for Financial Planning] Higher prices can chip away at your savings, so position your money to stay a step ahead. Watch this video to learn more!
WATCH VIDEO ➠
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An Overview of Canada's Consumer Price Index (CPI) [Video]
3 minute video explaining Canada's Consumer Price Index (CPI)
WATCH VIDEO ➠
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Below you will find my August and September Podcast Playlists. You are welcome to follow my Mindful Wealth Management Spotify account or any of my monthly podcasts so you can stay up to date on on the market updates and other information that I'm finding useful in a timely manner.
Click HERE to find the Mindful Wealth Management Spotify Account. |
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August Spotify Podcast Playlist
My August playlist was my first attempt at the idea of sharing some of the best podcasts I've come across in the last month. If you're only going to check one out, I'd highly recommend Why It's So Hard to Get the Oil Taps Turned Back On. This interview was from June, but I learned so much about the oil industry in this podcast and found it fascinating! There were some really interesting podcasts in August. I hope you enjoy
LISTEN HERE ➠
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September Spotify Podcast Playlist
This month we heard from Fidelity portfolio manager, Mark Schmehl on his assessment on the current state of the markets along with how he's positioning portfolios for what he see's lying ahead. We also have insights from Capital Group on how COVID has impacted the current state of inflation and more.
LISTEN HERE ➠
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The Fall is always my favourite time of year. Click on the picture to see the video on the Mindful Wealth Management Facebook page if you're in the mood for a laugh.
SNL nails it yet again!
WATCH HERE ➠ |
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