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Change: The Only Constant

Erica Szczech - Sep 11, 2020
Change has always been inevitable, but as a result of the pandemic, it may feel particularly unprecedented. Covid-19 has created a rapidly changing environment, ushering in a new era of digitization, deglobalization and debt.
Fall Autumn Red Leaves

Change has always been inevitable, but as a result of the pandemic, it may feel particularly unprecedented. Covid-19 has created a rapidly changing environment, ushering in a new era of digitization, deglobalization and debt.

Technology continues to drive the speed of change. While it has helped to keep economies from completely shutting down during the pandemic, it has also changed the way many of us live, adapting work and play to the confines of our homes.

Covid-19 has also accelerated the trend towards deglobalization, exposing nations' over-dependence on global supply chains. Over the summer, the U.S. continued to take actions to protect its national interests, reimposing tariffs on Canadian aluminum and instigating further trade tensions with China.

In order to support economies, the world has become substantially levered. Debt can be helpful when used to finance productive assets and generate new wealth to help economies grow. But problems can arise when debt becomes overextended. While stimulus efforts have helped to support economies and asset prices, the longer-term effects are yet to be seen. How will economies acclimate to significant levels of debt as these efforts wind down?

For many investors, today's concerns are likely different than those of early spring. The rebound of equity markets after the March lows created a disconnect between equity market performance and what was happening on the ground. What will drive economic recovery going forward?

Given the continuing uncertainty, gold has hit all-time highs. South of the border, the value of the U.S. dollar has been falling. U.S. containment efforts have been slower than expected, hampered by social and civil unrest. With just weeks until the presidential election, all eyes will be on the U.S. as a change in leadership may be imminent.

During periods of extreme change, it is more important than ever to take advantage of professional advice in managing financial assets. Investing requires shifting gears on a continuous basis, particularly in assessing new situation. Fast-moving market dynamics can mean additional risks, so careful review and monitoring of investments is vital. Balancing portfolio exposure to account for the many risk factors and potential economic outcomes can ensure that investing for the long term remains a profitable strategy.

Change will always be certainty. I continue to harness these inevitable changes so that you investments continue to work for you.