From the Editor: The Bright Side

A lot has been happening this year, but most of the headlines seem far from encouraging. Stock markets around the globe have been on a steady decline as the year has progressed. Inflation continues to be high, and supply chain problems are stubbornly persistent. There is still war in Ukraine, and let’s not forget this is all happening under the umbrella of an ongoing global pandemic. Moreover, current events seem to be described with some version of “the worst in decades.” At times like this, being told to grin at your troubles doesn’t feel like sound advice.

But remaining hopeful that better times are coming is an essential part of being a long-term investor. People tend to assume that what’s happened most recently will continue to happen. And when recent events have been negative, we develop a pessimistic outlook for the future. But when you look at events on a much longer timeline, you can see that things perhaps aren’t so grim.

Last year at our annual client event, we had the good fortune to have Matt Ridley as a guest speaker, and like Monty Python, he’s a product of the UK. He’s the author of several books, including his most famous, “The Rational Optimist.” One of Matt’s underlying messages is that not only has the world been getting better, but also the trend will continue in the future. And he outlines a compelling case for how innovation has been a cornerstone for those improvements. We can see this unfolding even now. As disheartening as current events seem, let’s not forget that the course of the pandemic and its effects could have been much worse if a vaccine hadn’t been created, and in record time no less. This is a great example of how innovation has a positive impact on the problems of the world, but also how great progress can get overrun by gloomy headlines.

While Ridley does argue that things are getting better rather than worse, his optimism for the future doesn’t mean that everything in the world is fine, or that there aren’t some areas or countries where things are getting worse. His view of optimism is on a global basis, rather than at a local level. But as individuals, how do we incorporate this viewpoint when assessing our own situations? One perspective is to focus on the things that we can control. This can be as simple as what we spend our money on or how much we set aside as savings. At Nexus, we can’t predict the future and are faced with making investment decisions in an uncertain world. What we can control is our ability to stick with our investment discipline of investing in high-quality stocks that we believe are well-positioned for the long term. While this sometimes can feel like a waiting game, we are confident in this proven approach. And if you didn’t have a chance to attend the Matt Ridley presentation last year, I recommend you view the recording on our website.

John Stevenson’s most recent blog, “The Long and Winding Road” delves deeper into the current environment. Also, in this issue, Devin Crago describes some of the challenges in ESG investing, and Denys Calvin provides more information on upcoming changes known as the “Client Focused Reforms”.

We are happy to welcome two more members to Nexus. Julie Crothers joins us as Vice President of Client Service and Business Development. And Ashleigh Oucharek joins our administrative team as a Portfolio Administrator. We are excited to welcome them to the team, and you can read more about both in our Inside Nexus section.