Following on the heels of a lackluster third quarter in equity markets, Q4 was as strong as anyone could have hoped. The S&P 500 returned nearly 10% during the last 3 months of the year, and 26.9% in 2021, leaving September’s volatility in its rearview mirror. That’s not to say, however, the fourth quarter came without its share of bumps and bruises as we experienced two pull backs of nearly 5% in the last 40 days of the quarter. Volatility persisted as the Omicron variant of COVID-19 took the world by storm and news of the Fed’s intent to raise interest rates sooner than expected hit the headlines. The Federal Open Market Committee (FOMC) took a more hawkish tone in Q4 in direct response to both rising inflation and an economy that is showing signs of health despite labor and supply chain shortages. It may feel counter intuitive following our experience in Q4, but history tells us increasing interest rates and strong prior-year equity performance are generally a positive indicator for what is to come.

Growing up in East Haven, I never really thought much of the trolley museum. As boys can be curious, we often would ride our bikes to the museum and explore around the trolley cars and tracks. The biggest thrill was placing a penny on the rail track near a trolley car. We would come back the next day in anticipation of the trolley car having moved and rolled over the penny that was on the rail. If you were lucky, the flattened penny was waiting there for you, and you were rewarded for your ingenuity and patience. You never used any coin other than a penny because “money was money” and a flattened quarter was an expensive adventure that was never guaranteed. Most times, the penny was still sitting on the rail, just as you left it. Then there were the times the penny was missing, and you never knew if someone beat you to discovering the flattened penny. Then of course there was the motherload, a wafer-thin piece of useless copper that you could not wait to show your friends. You could not tell your parents about your adventure because you would get in trouble for playing on the trolley tracks. It was an emotional dilemma. Anyway, your friends were always impressed.

The idea of perception can really get you thinking, what if I viewed this scenario from a different perspective or a different way? The way in which we perceive things dictates how we view the world, it also dictates what reality we see and live in. Each of us live in a different reality, almost quite literally because of the different forms of perception that we engage the world with. All of us have different beliefs, thoughts, mindsets, so on and so forth resulting in the way in which we view the life we live.