Weekly Market Commentary - October 21st, 2021

The Markets

Don’t get spooked!

Barron’s Big Money Poll is an exclusive survey of market sentiment among professional investors in the United States. Last week, Nicholas Jasinski reported on 2021’s findings:

“America’s money managers are optimistic about the long-term outlook for the economy, the financial markets, and the recovery from the pandemic. It’s the short-term prognosis that concerns them. Monetary and fiscal policies are in flux. Supply-chain bottlenecks and labor shortages are igniting inflation and threatening corporate profit margins, and the economic recovery from 2020’s recession –so robust until now – is decelerating. Add pricey stock valuations and rising bond yields, and the immediate future suddenly looks more challenging than the recent past.”

Among those surveyed by Barron’s, half are bullish about prospects for the next 12 months, down from 67 percent last spring. Twelve percent are bearish, up from seven percent last spring, and the rest are neutral. Fifty percent said stock markets are fairly valued at current levels, and 80 percent anticipate a stock market correction – a drop of about 10 percent from a recent high – during the next six months.

Market corrections are not all that unusual. The average correction lasts a few months, reported James Chen on Investopedia. That’s long enough, though, for loss aversion to kick in. Research has found that, psychologically, the pain from loss is twice as powerful as the pleasure from gain. As a result, when markets decline, loss aversion causes some investors to wonder whether they should make changes to their investment strategies and that can have a negative impact on long-term financial goals.

Last week, major North American indices finished the week higher, and the yield on a 10-year U.S. Treasuries and Government of Canada bonds moved lower.

If you have any questions or concerns about your investment portfolio or current market conditions, please don’t hesitate to give us a call.

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Pumpkins and tombstones and zombies, oh my!

Like Christmas and Thanksgiving, Halloween has come into its own, gaining a fanatic fan base that is dying to let the festivities begin. Most of us have our traditions; for us, it’s carving pumpkins, doing the Monster Mash, and of course, trick-or-treating!

But have you ever stopped to wonder why we have these traditions?

Halloween began as the Gaelic holiday of Samhain. Contrary to popular belief, this wasn’t a holiday to resurrect the dead, but rather celebrate the end of the harvest and the coming of the cold, dark winter. Villages would hold massive bonfires, and for a night they would drink, feast, and celebrate their hard work. When the fires died down, the villagers would take a log back to their homes. Using these, they would light a fire in their hearth believing it would keep them safe and warm through the harsh winter months to come. 

It is from these archaic rituals that our modern-day festivities have evolved from, including some of the most practiced activities, like the carving of pumpkins!

The story of the Jack-O-Lantern starts with a man named ‘Stingy Jack’. Jack was an unsavoury type, the outcast of his village. The story says that Jack tricked the Devil to buy himself more time on Earth. Because of this, when Jack inevitably passed away, he was not allowed into Heaven. So, he wandered down to the gates of Hell, where he begged and pleaded, but the Devil also refused Jack entrance, sending him off with only a burning coal to light his way. Jack then carved a turnip (not a pumpkin) and placed the coal inside it to light his way.

The people of Scotland and Ireland then began to carve scary or angry faces in turnips and potatoes, placing a candle in them to illuminate them in the windows or on porches to ward off the roaming Stingy Jack or any other ill-intentioned spirits. When the Irish migrated to America, they discovered that pumpkins were the perfect fit for Jack-O-Lanterns, thus giving us the family-friendly tradition we enjoy today. 

Weekly Focus - Think About It

“We make up horrors to help us cope with the real ones.” 
—Stephen King, author

Best regards,