2021 Year in Review

2021 was another great reminder that forecasts are close to worthless. Firstly, many expected a return to normal which didn't really happen. Secondly, after a somewhat surprising positive year in 2020 one could have been forgiven for predicting negative returns this year. Not only did that not happen but we saw a year with very little volatility.

The world market index is (at the time of this writing) up by 17%, after gains of 14% and 25% the two years before. These figures may seem incredible to those who've only been exposed to negativity for close on two years.

The great companies of the world continue to make profits, with this being either reinvested into attractive projects or distributed to shareholders. As an owner of these companies we and our clients passively benefit from human ingenuity.

After three positive years (2018 was the last negative year) it would seem sensible to prepare our clients for both a year of negative returns and one with more volatility. Doing so wouldn't mean we predict that this will happen but only that we know these events come around with some regularity. And remember, surprise is the mother of panic. Do your "life boat" drills, whatever this might look like.

The crazy events of "covid season 2" also reminded me how counter-cultural our approach to financial planning is. With the pace of world events these days I cannot imagine the anguish of being a market-focused adviser. But this is what we are competing against. Your next client is all in all likelihood at this very moment receiving a forecast email from their "adviser". The email probably discusses the market in great detail and sounds very clever.

To convert this client to a goal-focused and planning-driven approach takes intentional work and focus. But the result is a client for life and another family saved. What a "job" we have.

We wish each of you a restful break and hope to see you back in 2022 ready to further improve our great profession.