The past 18 months have been an exercise in frustration, especially with respect to the bond market. Every time some good news came out, new economic data would counteract it and drive interest rates higher. The war in Israel felt like the last straw. This week, I met with a client who was quite concerned about everything that's taken place over the last three years. As we chatted about how the market goes through cycles, he quickly proclaimed that "this time is different".

 

One of Sir John Templeton's most famous quotes is:

 

“The investor who says, ‘This time is different,’ when in fact it’s virtually a repeat of an earlier situation, has uttered among the four most costly words in the annals of investing.”

 

It is easy to get caught up in the emotions of the market, especially when markets are volatile and there seems to be dark clouds on the horizon everywhere. However, during times like this, it's important to try and use history to give us an idea of what the future might look like.

 

Another good quote that I like is from Carlos Slim Hela:

 

"With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future."

 

With these two quotes in mind, I thought it might be appropriate to keep things simple and look at a chart that shows the market over the last 123 years. The chart below shows the growth of one dollar from 1900 to 1999 and the growth from 2000 to 2023 is overlaid in red. The point is to show that, so far, the first quarter of this century looks very similar to what happened last century. So, when someone tells you “This time is different", remember the chart below. It's not different, just rinse and repeat!

Source : http://www.econ.yale.edu/~shiller/data.htm

 

I've also included a piece from our CIBC Economics team entitled "A Canadian recession? What’s in the eye of the beholder?".

 

As always, if you have any questions, please feel free to give us a call at any time.

 

Have a great weekend.

 

Milan