‘Twas the week before Christmas
(And you know it’s true)
COVID looms large
In our annual review

The coronavirus surged
At the start of the year
Breaking news seemed dismal
The result was much fear

Lockdowns inevitable
We sheltered in place
Businesses and employment
Much suffering they face

Risk assets did plummet
Volatility rose
We strove to stay balanced
Through uncertainty’s woes

We oft say “Don’t fix a ship”
Our approach—we stayed true
Good, strong business models
And balance sheets too!

But sentiment turns on a dime
Resilience is key
Be in two places at once
To create offsets, you see?

Unprecedented stimulus
Governments’ concession
Played tug-o-war with
Demand suppression

Q2 came…REBOUND!
Reactions to stimulus
(Fiscal or monetary)
Investors were joyous

Interest rates remained low
With recovery chatter
The markets kept rising
Searching for records to shatter

On Tesla! On Snowflake!
On Airbnb! On DoorDash!
The tech darlings flourished
(despite not making much cash)

With a global pandemic,
And economic contraction,
We saw all-time highs,
…Seems a strange reaction

Low interest rates can help
Explain this conundrum
The lower the discount rate
The higher valuations become

Conjecture over elections
Make investors disturbed
But we always think long-term
Our holdings…less perturbed

And now the U.S. gets Biden
Some call him Old Joe
A more conciliatory tone
Towards trade, Ho! Ho! Ho!

It’s near the end of the year
Vaccines bring some hope
That restrictions could ease
This slippery slope

Has the vaccine ushered in
A market rotation?
Is value back in favour
Or is this just equity duration?

While there’s no crystal ball
We potentially see
Positive but slower growth
From accommodative policy

Negative correlation
Between bonds and stocks
Should continue to function
As a hedge against shocks

While we watch inflation
The rebound is tenuous
Deflation more near-term
And risks are continuous

We focus on resilience
No matter the churns
And managing risks
Rather than just seeking returns

For everyone that’s reading
May you share great cheer
Wishing you health, hope, and prosperity
And a happy New Year!