It’s hard to know how to describe 2020, at least from a market perspective. If you told me in late April that markets would be positive, some considerably so, by year's end, I would have recommended curtailing your supply of government gummies. Not only were most markets 30% lower, lockdowns were underway as COVID-19 numbers soared. Further losses felt inevitable. However, once the U.S. Federal Reserve started aggressively printing money, along with strong government spending across the world, markets began climbing.
As the years pass, it’s increasingly rare to experience first-time occurrences. This year, however, there were two. Though only for less than a day, oil prices plummeted to negative values. And more significantly, this was the first V-shaped recovery in history. Until 2020, market crashes have never returned to previous values without either retesting their lows or experiencing an intermittent correction. May you live in interesting times!
The lesson to take from 2020 is to expect the unexpected. We live in an increasingly connected world. Connection brings many advantages, but it also leads to unpredictable events, both good and bad. In an uncertain world, you can either gamble and hope you’re lucky, or implement a balanced approach to take advantage of a situation when presented with the opportunity. I prefer the latter.
Moving forward, we will continue to take a measured approach, but I am more optimistic than I have been for some time. Not because the markets have rallied, but because some long overdue trends appear to be reversing. We are currently overweight in Emerging Markets and value and energy stocks. Based on historical trends, they all should have rebounded a few years ago, but for various reasons, including the pandemic, they have not. However, each has meaningfully outperformed over the last few months. Given the historical trends and their low valuations, there is reason to believe the next few years could be quite good, while ever maintaining a balanced approach.
Lastly, on January 1, everyone is eligible to contribute another $6,000 to their TFSAs for a lifetime total of $75,500.

December is a good time to look back and consider past decisions and experiences. Given the historical nature of 2020, this seems even more apt than ever. With that in mind, I’ve been reading a lot of history - some recent, some less so. I also made time to write three blogs relating to the lessons I’ve learned from doing so. I hope you enjoy!
If you’re looking for more timely articles, thoughts and other blog posts from me, you can find them on my Twitter, Facebook, and LinkedIn feeds, as we’ll continue to post things we feel are of value throughout the holiday season.

The Lessons of History by Will and Ariel Durant: After writing more than 10,000 pages of history covering virtually every age and place, Will and Ariel Durant thought it prudent to write a summary of their learnings. The Lessons of History was the result. This book is highly readable, only 100 pages long, and packed with valuable insights - a must-read if you have an interest in history or the patterns that repeatedly occur throughout human existence.
The Splendid and the Vile by Eric Larson: Some writers describe what happened. Others show you. But, Eric Larson, he makes you hold your breath as you picture Nazi bombs raining down in the middle of the night - even though you already know how things turn out. A riveting account of Churchill’s first year as Prime Minister. A big thanks to my client Lynda for telling me about it!

The Changing World Order (Chapter 8) by Ray Dalio: This chapter from Ray Dalio’s upcoming book covers “the timeless and universal cause/effect relationships that shape the internal orders that people have and the behaviours that drive the shifts between periods of order and periods of disorder.” Dalio does this by discussing the following three dynamics and one variable: wealth and power struggle, the balance of power, favouring short-term enjoyment over long-term health, and the failure to learn from history.

The Changing World Order (Chapter 9) by Ray Dalio: Chapter 9 expands on the previous chapter with a close look at where the U.S. stands from a historical point of view. Spoiler Alert: It’s not looking great.

In the Bird Cage by Steve Martin: Written in 2007, Steve Martin describes his early years in the world of comedy. If you enjoy this, you may want to get his book, Born Standing Up. The audio book is especially good as he narrates it with his classic comedic timing.
The Only Thing, Historically, That's Curbed Inequality: Catastrophe by Walter Scheidel: “Throughout history, only massive, violent shocks that upended the established order proved powerful enough to flatten disparities in income and wealth. They appeared in four different guises: mass-mobilization warfare, violent and transformative revolutions, state collapse, and catastrophic epidemics. Hundreds of millions perished in their wake, and by the time these crises had passed, the gap between rich and poor had shrunk.”
'Sistine Chapel of the ancients' rock art discovered in remote Amazon forest by Dalya Alberge: Incredible prehistoric artwork recently found.
We Need a New Approach to Teaching Modern Chinese History by James A. Millward: Some thoughts on the issues around how modern Chinese history has been taught in the west.
Accountable to Darwin vs. Accountable to Newton by Morgan Housel: Morgan Housel on how some things can change, how some stay the same, and how to know when each happens.

King of Kings (Part 1) by Hardcore History: The first of a fascinating three-part series on ancient empires. This three-and-a-half hour episode begins with the brutal regime of the Assirian Empire. Their eventual fall benefited the Babylonians, Medes, and Lydians for a time, until the upstart Persian Empire surprisingly rose to power. 
Supernova in the East (Part 5) by Hardcore History: Fifth of a six-part series on Japan’s role in WWII. This episode describes the fierce island warfare on New Guinea and other south Pacific islands. War is usually awful, but this theatre was particularly brutal. Remote locations, scant supply, a punishing geography, and ferocious combatants combined to make this fascinating, but often difficult to get through. If you’re squeamish, you may want to pass on this.
The 90s: Part 1, 2a, 2b, 3, 4, 5a, 5b, 6, 7, 8, and 9 via Ongoing History of New Music: If you like ’90s alternative music, this is an absolute must listen! Everything you could want from the scene’s foundations and the era’s groundbreaking female artists to grunge, Brit Pop, punk and others. As someone deeply into music at the time, it was nostalgic, but also surprising to see how my musical beliefs were so in lock-step with the zeitgeist of the day. And in some respects still are. 

It’s been a quarter century since the Buffalo Bills last clinched the AFC East title. As a lifelong fan, the drought has been especially frustrating since there are only three other teams in the division. Nevertheless, on Sunday, the Bills finally won the division with three games remaining in the season.

Next stop, hopefully a playoff win or two. I can hardly wait!

“What gets us into trouble is not what we don't know. It's what we know for sure that just ain't so.”
- Mark Twain
- Winston Churchill
“Is the only lesson of history to be that mankind is unteachable?” 
- Winston Churchill
“The present is the past rolled up for action, and the past is the present unrolled for understanding.”
- Will and Ariel Durante
“Human behavior has changed, but not human nature.”
- Will and Ariel Durante
“Nature smiles at the union of freedom and equality in our utopias. For freedom and equality are sworn and everlasting enemies, and when one prevails the other dies.”
- Will and Ariel Durante

My blog and newsletter began as an effort to keep in touch with clients. To be honest, I was making it up as I went. Over the years, I realized that if I created something I’d love receiving myself, others might feel the same way. Although they’ve become a labour of love, more work goes into them than one might think. With that in mind, there are a few people I’d like to thank.
When you work for a large and reputable firm like Raymond James, a high standard must be maintained. As a result, anything sent to the public must be approved. The marketing team at RJ consistently does a great job returning them to me in a timely fashion and have bailed me out more than a few times when I’ve pushed deadlines beyond practicality.
Yvonne Robertson has quietly edited this newsletter and my blogs for years. Aside from ensuring all the I’s are dotted and T’s are crossed, she’s provided invaluable feedback, pointed out my blind spots, is most responsible for the look and feel for the newsletter, and has helped me improve as a writer.
Running a wealth management practice is a multi-faceted affair. Portfolios require rebalancing, meetings booked, paperwork updated, and many more. Although I’m the face of the practice, Carolina daSilva ensures everything runs smoothly behind the scenes while also spearheading our social media efforts.
Without readers, the reasons to write something of value can diminish. Few things are more gratifying than when someone reaches out to say they’ve enjoyed the newsletter or a blog I’ve written.
Lastly, 20 years ago, a wonderful client who recently passed away, turned to me in a meeting and said, “Other than my home, everything I have is with you.” I already knew this. But hearing those words shook me. Ever since, I’ve never forgotten how important the trust my clients put in me is. Without you and your faith, I have no idea where I’d be or what my life would look like. So to my clients, thank you so very much!!
This has been a hard year for many of us, so I’d like to wish everyone a happy and especially a healthy holiday season! I look forward to talking to many of you in 2021.
Matthew Lekushoff

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