Age is all a matter of perspective
Published on August 9, 2019
Age is all a matter of perspective, so too is market sentiment

I went golfing with a friend of my son’s the other day. He’s a 23-year old rising lacrosse star. He received a lacrosse scholarship from a US university and now plays professionally for a team in Baltimore. He’s regularly flown across the country at the expense of the team to play in front of 30,000 enthusiastic fans. From my perspective, it’s truly an exciting time for him. By all appearances, he has the world by the tail.

However, his discussions with me as we moved from hole to hole, green to green, did not focus on his athletic ability, his travels or the success he’s achieved so far in his life. Instead, he was lamenting about feeling old at the age of 23.

I could have shared with him my own stories of what aging feels like from the perspective of someone more than twice his age. I didn’t. I let him share exactly how he was feeling without interruption or judgement. However, it did get me thinking about how his perceptions relate more broadly to the human condition and how we perceive the world.

We are living in an environment of near-historic lows in interest rates, unemployment and inflation. Meanwhile, the Canadian economy continues to chug along on a foundation of strong, stable companies across financial services, telecommunications, technology, natural resources and transportation industries. Markets have their moments of volatility as they react to one media headline or another, but for the most part they continue to rise.

Yet, when I speak with investors, they aren’t focused on these positive factors. Rather, they are fixated on the geopolitical issues of the day, or the dire warnings of a global economic slowdown, or a looming bust of the national housing bubble. The fact that we are in the market equivalent of the summer doldrums puts people further on edge. The quiet in the markets has investors bracing for what they see as the calm before the storm.

There may be some light rain in the market forecast, but no real storms brewing

I don’t happen to see a storm looming on the horizon. There are some worrying signs that investors are latching onto, but no more than usual. The run-up to the US elections in 2020 will likely produce some anxiety, as will the prospect of a no-deal Brexit.

Meanwhile, the Toronto housing market defied the normal sleepy summer lull by posting sales above June levels, and the average price of new condos has reached a new milestone at $1,000 per square foot. Elsewhere in Canada, however, the Canadian Mortgage and Housing Corp. has downgraded their national assessment from a “high degree of vulnerability” to a “moderate degree of vulnerability”.

This, of course, provides cold comfort for the thousands upon thousands of parents who still have adult children living at home, as the number of single men under the age of 25 living with their parents reaches historic highs.

Yet, despite these concerns, I firmly believe the housing market and the equity markets will sort themselves out.

Even the most persistent challenges find their way to resolution over time

Sometimes, bad begets bad in what becomes a self-fulfilling prophecy. Investors see uncertainty, they feel uncertainty, they react based on their fear of uncertainty and markets correct accordingly.

Right now, markets continue to defy the myriad uncertainties swirling about. However, if enough investors react to the negative sentiment, the market tides may shift.

The key, as always, is to remain calm and stay the course. As history proves, even the most persistent challenges find their way to resolution over time. People are resilient and resourceful, and markets and economies adjust. We simply must enjoy the calm, carry an umbrella and wait out any storms that come.


Stephen Sisokin


Information is General Only. This newsletter is for general information purposes only. It is not intended as specific investment, financial, legal or tax advice and you should not rely on it as such. This newsletter does not constitute the official version of Howard, Barclay & Associates Ltd.'s disclosure documents and may not always be the most current. This newsletter and information contained therein is provided “as is”. Howard, Barclay & Associates Ltd. does not warrant the accuracy, adequacy, timeliness, or completeness of this newsletter and information contained therein, and disclaims liability for any errors or omissions.

« Go Back