Happy New Year! I hope that 2021 was a good year for you and yours; as much as could be expected given that it was the first full year of the first modern day pandemic. That said we certainly made gains in 2021 thanks to the miracle of vaccines. We moved closer to the other side of the pandemic. For investors, it was an incredible year. What a paradox that the markets embraced a pandemic. We were treaded to lofty double digit gains. Inflation, supply chain issues and fears of rising rates shared the headlines with COVID. We’re looking back at 2021 on the Sunday Reads.
Writing a diary for the markets
As you may know, I write a weekly column for MoneySense where I make sense of the markets. And yes, in some weeks and months, the markets make no sense at all. The column offers a wonderful timestamp of events. It is a diary for the markets.
I looked back at every post from 2021 to deliver this beast of a write-up, over 3000 words …
Don’t let the length of the post deter you, it’s a breezy read that moves through the events in chronological order. We are ‘time blind’ to many of the events. Does it not feel like forever we’ve been worrying about and playing hunger games with vaccines? It feels like inflation has been on our minds for much more than a year. But these are very recent events. A few of the major headlines that made the year 2021.
I won’t give away too much, but here’s my favourite MoneySense post of 2021.
The investment ideas put on the table
While not advice, it was nice to go back and see that the investment ideas put on the table more than delivered in 2021. Of course we might start with our sensible couch potato portfolio, and then many investors will layer in other assets.
Ideas such as bitcoin, Canadian energy producers, commodities and Canadian banks and big Canadian dividend payers certainly paid off. Energy was the top sector for the year.
Emerging markets were often suggested and that one was a miss. But that is a long-term and core portfolio asset, I’m guessing that they will have their day again, eventually.
Enjoy the look back at 2021.
More Sunday Reads
Jonathan Chevreau offers more thoughts with – here’s to 2022, surely it will be better than 2021.
Here is a very good read (paywall) on getting ready for 2022, from Ian McGugan at the Globe & Mail. Here is Ian’s take on the type of inflation created in 2021 …
The easiest way to explain why things are different today is to state the obvious – the pandemic has been a weird time. Lockdowns forced consumers to suddenly shift their buying from services to goods. Practically overnight, families stopped dining out in restaurants, pumping iron at the gym and going on vacation. Instead, they ordered new stoves, new exercise bikes and a myriad of other diversions for their new stay-at-home lives. No wonder this unexpected wave of demand propelled durable-goods prices to unheard-of heights.
That is a very reasonable take on things. And Ian hopes it might set the table for inflation to taper off in 2022. I would not be surprised at all to see this call come to fruition.
If the pandemic eases in 2022 and consumers go back to more normal spending patterns, price pressures could quickly fade away. But that is a hope, not a certainty.
Banker on Wheels is one of my favourite investment blogs and resources. Here’s another stellar effort with so many interesting charts and tables. The long game. Historical market returns and 2022 expectations.
Beat the TSX update
There is a Beat The TSX update on dividendstrategy.ca. Investors who adopted the BTSX strategy received a dividend increase in 2021 of 9% . But as the post points out, a dividend increase is not a guarantee. Here’s the dividend history from the year 2012.
And from that same post, an interesting chart, for the Canadian market.
At My Own Advisor, Mark offers 5 stocks that he bought more of in 2021.
Here is an incredible chart on the forward valuations (PE ratios) for Canadian vs US. stocks. We’re still ‘cheap’, eh.
Value investing came back in style towards the back end of 2021. Perhaps it’s not time yet to worry (too much) about your Canadian home bias.
Rob at Passive Canadian Income delivers his 2021 portfolio summary. Rob also discusses the dividend cuts of the past. He has moved more away from chasing the big dividends toward higher quality companies. While we all might love our big dividends and other portfolio income, we should remember that in the end, it does come down to total returns. How much you got? More money creates more income.
3 predictions from Mike The Dividend Guy
Mike The Dividend Guy does a 2021 recap and offers 3 predictions for 2022 on ESG, Canadian banks and inflation.
And on ‘how to get there’, here is a timely post on dollar cost averaging from GenYMoney.
On Million Dollar Journey, the best short term investments in Canada.
Make sure you’re covered with that emergency fund. From there we might be careful to not have too much in cash that is losing money to inflation every year. As part of your emergency fund you might also build a dedicated lower-risk investment portfolio in a TFSA account. Use some very short bonds within that mix. Consider layering in some investments known to protect against inflation.
Here’s the week in review on Dividend Hawk. Thanks to Hawk for all of the wonderful support over the year.
2022 resolutions on Another Loonie.
And if you like to follow the dividends, here’s another blog for you – Dividend Daddy who delivered a dividend update post.
What’s in store for 2022?
There are many signs that Omicron is a much friendlier variant compared to Delta. As I’ve offered in this blog, we are likely saying goodbye to the pandemic in early 2022.
Our core portfolios should be ready for most anything, but we might recognize opportunities to shade the portfolio to take advantage of the post-pandemic world.
I’ll offer up some thoughts on those assets and potential opportunity.
Thanks for reading in 2021. I wish you all of the best of health, wealth and happiness in 2022. A successful portfolio and financial plan can help, on all of those fronts.
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