Waterloo Region Record

The bright side is there if you take time to look

- NORM STEFNITZ As financial analyst and investment counsellor, Norm Stefnitz advised families, estates, trusts and charities through six decades of market turmoil and investment opportunit­y. He can be reached at n.stefnitz@cogeco.ca.

Canadians find the daily news stressful. We just want relief. We want normal. Business forecaster­s tell us things will soon return to normal. But, will they?

After every past crisis, life went on, except in each case life changed, and looking back we can say, for the better. The current life-altering situation is often compared with past crises. Those events like the Great Recession and 9/11 panic were contained by corrective action taken. This stock market crash and health crisis will also pass into history, but life will be different.

We know the bad, but what have we learned for the good? Here are some thought-provoking examples that demonstrat­e how crisis can be merely the other side of opportunit­y.

Canada’s federal government is conducting a virtual parliament part of the time, starting with question period carried out online rather than “in the House.” It’s potentiall­y efficient (more informatio­n at less dollar-cost). Can online apply also at provincial, municipal and levels?

Students and teachers are able to carry out distance learning from home instead of classroom, by using the internet that young minds are very familiar with. Will that medium be expanded, with two-way questions and answers and marking, to benefit both teachers and students?

Religious practice can be carried out online, too. Pope Francis’ Easter mass before a TV camera in a nearly empty St. Peter’s was telecast to millions more than were ever able to attend inside the Basilica. Isn’t that a model for local places of worship?

Many investment funds will report double-digit declines in their first quarter net returns, as they did 12 years ago. Their investor clients realize that stable returns are unlikely when the largest part of their portfolios is invested in unstable public equities. Shouldn’t they reassess how much equity weight is still appropriat­e?

It could be worrisome for the everyday investor. That’s why we recommende­d they listen to an experience­d adviser and ensure their portfolios are properly balanced to reflect their needs, in earlier articles in this series. How can a digital adviser satisfy that need?

University endowments, charitable and hospital foundation­s are fiduciarie­s — they hold investment­s to benefit others. Many years ago, my former trust company boss, the late Norman Cunningham, zeroed in on the nature of these services by explaining “The fiduciary business is the investment business.” Did we forget the hallmark of a fiduciary — the prudent investor rule?

Lower but more stable net returns in the future from endowment and foundation portfolios may become acceptable if their beneficiar­ies’ income requiremen­ts were to reduce also, rather than continuous­ly rise. Will perpetual double-digit growth need to be “rethunk” in a low-growth era?

Technologi­cal advances and innovation show how costs can reduce, using remote medical testing and diagnosis, digitized regional health centres, some for-profit health services and profession­alized long-term care. Isn’t it likely that tech applicatio­ns will proliferat­e?

Some homes, condos, businesses and social and charitable properties may become unaffordab­le and even redundant in this digital age. Do they call for a rethinking of “what’s really needed?”

Old-fashioned household virtues practised during lockdown challenge us. Have we forgotten parenting, togetherne­ss, games, home schooling, home cooking (my contributi­on was a 14-ingredient “empty the fridge” stew thick enough to stand up a spoon) and oral communicat­ion?

Earth Day, April 22, dramatized not only the seriousnes­s of the stock market and economic downtrends worldwide but also a directly consequent­ial fall in air pollution. Can a gradual recovery coexist with clean air and a healthy environmen­t?

Elementary and secondary schools today and universiti­es tomorrow may need to merge and combine, just as businesses do, to reduce costs. Will they be able to operate without annually rising grants from government­s and big returns from their endowments and foundation­s?

Education and health services eat up almost two thirds of the government’s budget. In normal times, a finance minister’s job is the loneliest in every cabinet — How to balance these big slices against spending requests from two dozen ministers comprising the other one third? Will balancing many budgets after the recession become a forgotten hope?

Everyone knows present times are abnormal. On top of immense deficits accumulate­d from past years of overspendi­ng, government­s and central banks added huge amounts to prevent the world economy from collapse. That new role will be analyzed in a later article in this series.

 ?? ADRIAN WYLD THE CANADIAN PRESS FILE PHOTO ?? Crisis can be merely the other side of opportunit­y, with Norm Stefnitz pointing to how some of the business of Parliament has been conducted online.
ADRIAN WYLD THE CANADIAN PRESS FILE PHOTO Crisis can be merely the other side of opportunit­y, with Norm Stefnitz pointing to how some of the business of Parliament has been conducted online.

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