Optimistic Thoughts on a New Year
Throughout my adult life, I have always looked toward New Year’s Day with renewed optimism for the coming year. This year, despite a recent rise in COVID-19 cases, I find myself more optimistic than ever before. Let me explain.
I think we can all agree the world changed in early 2020 when we faced the greatest global public health crisis in a hundred years. The S&P 500 experienced a one-third decline in just 33 days but the panic wasn’t limited to the markets (remember the run on toilet paper?). People were genuinely afraid. Afraid for their health, their families, and their jobs. Then something interesting happened.
The government responded to the onset of the pandemic essentially by shutting down the global economy— placing it in a kind of medically-induced coma. Congress and the Federal Reserve responded immediately with a wave of fiscal and monetary stimulus which was and remains without historical precedent. Meanwhile, the private sector figured out how to deal with it economically, with safety measures, work-from-home programs, and new technology for people to use to adapt to the situation.
And then there were the scientists. The global response from the scientific community was extraordinary. Earlier in 2021, I read “The Code Breaker: Jennifer Doudna, Gene Editing, and the Future of the Human Race,” which explained how she earned the Nobel Prize for her work in creating the platform that would help develop the COVID-19 vaccines. If you’re looking for a reason for optimism for future health care, this book is it. The treatments, vaccines and, most importantly, the understanding of how the disease works, is growing by leaps and bounds. This disease, while tragic, has created tremendous advances in medicine that will benefit us and future generations. This, in my opinion, is one of the keys to my optimism for 2022: that the world is figuring out how to live in this new reality.
Please don’t misunderstand, I think these have undoubtedly been the two most shocking and terrifying years for investors since the Global Financial Crisis of 2008- 09. First the outbreak of the pandemic happened, next the bitterly partisan election, then the pandemic’s second major wave, a 40-year inflation spike, and the now, the Omicron variant. We wouldn’t be human if these things didn’t concern us.
But like all crises before, what came to matter most was not what the economy or the markets did, but how we reacted to it. My advice to you in March of 2020 was to stay the course because history showed us that this, too, shall pass. We kept acting on a long-term plan rather than reacting to current events, and positive outcomes followed.
Which brings me back to my reason for optimism: the world keeps getting better. Despite being consistently hit with new crises, humankind has always responded to them with solutions. It’s why our standard of living, throughout the globe, has continued to improve. We have to believe this will always be the case.
So this year, while we will undoubtedly experience a few crises along the way, I hope you’ll join me in believing that we will have a great 2022!
Happy New Year!
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and man not be invested into directly.
The economic forecasts set forth in the material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.