Investing takeaways from an unforgettable 2020
No one could have predicted the kind of year that 2020 would turn out to be. As the coronavirus pandemic took hold in March, it upended lives, economies, social structures and political systems. But even as we mourn lives lost, companies that collapsed and consequences for our daily lives, we find cause for hope and optimism.
We faced the greatest public health challenge of the past century and, as a whole, have learned to adapt and cope. For the Newport team, the past year validated the work we put into building our organizational systems and processes.
The experience has left us with many thoughts and reflections on a year that we won’t soon forget—even if many of us will be happy to put it in the rear-view mirror.
Several of our team members have offered to share their thoughts on 2020, and the key lessons and observations they’ll take away from this pandemic year:
This year reminded business owners of the importance of taking a broad and balanced investment view that’s not overly influenced by conditions in their specific industries, especially ones that have been hit hard by the pandemic. It’s also a reminder of the value of diversification. Our entrepreneur clients largely managed to avoid letting factors impacting their business results colour their decisions regarding their portfolios. That discipline should serve them well over the long term.
Don’t let perfect be the enemy of the good. There’s no perfect portfolio in 2020 and no perfect trade at the perfect time. If you missed something, were too early or too late, you can always alter course. Don’t get bogged down and lose sight of the bigger picture.
Baby Boomers in Canada have been so fortunate—a generation with no wars, no famine and, for the most part, no significant hardship of any kind, at least until this year. Many people lost their jobs and businesses and hopes for financial security. I think we were reminded that saving for a “rainy day” like COVID-19 and investing prudently over the long-term helps cushion the blow of this type of black swan event.
It was apparent from the start of the pandemic that there was a great deal of transformation going on in the economy, and our world will be a lot different in the years ahead. Our challenge was, and is, to carefully evaluate the prospects of every asset class we own on behalf of our clients. The question was simple: “Is it still a worthwhile investment?” That was the baseline for our decision-making, and it’s ongoing. What was a good investment in the past may not be in the future – and vice versa. We’re fortunate to have more flexibility than most because we draw on a large universe of multiple asset classes. That never gets old.
It’s usually a good sign when the absence of someone makes the heart grow fonder! We miss seeing our clients and business partners. The year reinforced what we already knew: that we have incredible business partners across the country whose resilience in the face of both personal and business adversity inspires us. We’ve tried as best as possible to replicate the power of personal connection, but it can never be replaced. Never can the phrase “We’ll see you soon” be taken for granted.
Everyone is reacting and handling the crisis differently, but there seems to be a consensus that we’re all doing the best we can, given the unusual circumstances. I believe that we’ve all had to look at new ways of doing business, of taking care of our clients and even coping with pandemic restrictions—and learning from each other on how to do that best. In some ways, I feel the world is more connected than ever, despite social distancing measures.
We’re in the final stretch of an unforgettable year. For better or worse, we will all look back and not only remember the hardship, but what we learned, how we adapted, and who we became. We strengthened our client relationships by communicating extensively – through blogs, email updates and of course, socially-distanced phone-calls. For me, it was a true privilege to help clients navigate the maze of ‘fake news’ and focus on their financial objectives.
Not all portfolios are created equal and this year certainly tested the strength of many. It’s important in any market, but particularly during times of greater uncertainty, to have the experience to make critical investment decisions. The importance of having a seasoned Investment Committee sharing responsibility, distilling information and, ultimately, making key decisions was more important this year than any other. We’ve always believed better decisions are made when we engage the full breadth and depth of our skill sets and I am reminded of that again this year.
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