2020: An unforgettable year to forget

Ahmed Farooq, CIMA®, CFP

Ahmed Farooq, CIMA®, CFP
Vice President - ETF Business Development at Franklin Templeton Canada

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Happy New Year everyone. Where do I start after a year like 2020? One thing is for sure, we will all remember the past year for the rest of our lives, both from a personal and professional standpoint.

Aside from ubiquitous masks and hand sanitizer, one of the major changes has been the shift to working from home, accelerating a digitization trend that already had a lot of momentum before the pandemic. In the investment world, the markets experienced a historically steep drop in late February and March, but bounced back strongly, driven by the performance of some of the mega-cap names in the tech space. By the end of 2020, all major market indices had posted positives returns and fixed income markets were also up, allowing most investment portfolios to finish the year with gains. This recovery in the markets is contrary to the health of the global economy, however, which is still being battered by the pandemic.

Personally speaking, 2020 did have some positives. Without the countless hours spent on the road and flying on airplanes, I was able to spend more time with my family—a daily breakfast routine with my kids, school drop offs and family evening walks—which I greatly appreciated.

Professionally speaking, digital meetings have largely served their purpose and proven effective, but I’m looking forward to seeing clients in person again. The adrenaline of flying somewhere to see a client or speaking at a conference is something I miss greatly. The rapid development of COVID-19 vaccines was a positive development to end a pretty bleak year, although the distribution of those vaccines will be a huge logistical challenge for world leaders in 2021.

Overall, and despite the coronavirus still dominating our lives, I’m looking forward to the coming year. Hope is one of the key elements of life, so here’s hoping we can continue to make progress in our fight against COVID-19 and bring some normalcy back to our lives in 2021. I can’t wait to see clients, co-workers, and my extended family and friends in real life. So, good riddance to 2020, and wishing everyone success for 2021.

 

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What Are the Risks?

Commissions, management fees and expenses may all be associated with investments in ETFs. Investors should carefully consider an ETF’s investment objectives and strategies, risks, fees and expenses before investing. The prospectus and ETF facts contain this and other information. Please read the prospectus and ETF facts carefully before investing. ETFs trade like stocks, fluctuate in market value and may trade at prices above or below the ETF’s net asset value. Brokerage commissions and ETF expenses will reduce returns. Performance of an ETF may vary significantly from the performance of an index, as a result of transaction costs, expenses and other factors. The indicated rates of return are the historical annual compounded total returns including changes in share or unit value and reinvestment of all dividends or distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any security holder that would have reduced returns. ETFs are not guaranteed, their values change frequently and past performance may not be repeated.

Ahmed Farooq’s comments, opinions and analyses are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. Because market and economic conditions are subject to rapid change, comments, opinions and analyses are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment or strategy.

All investments involve risks, including the possible loss of principal. Investments in foreign securities involve special risks including currency fluctuations, economic instability and political developments. Investments in emerging markets, of which frontier markets are a subset, involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Because these frameworks are typically even less developed in frontier markets, as well as various factors including the increased potential for extreme price volatility, illiquidity, trade barriers and exchange controls, the risks associated with emerging markets are magnified in frontier markets. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions.