Prospective Hindsight

Given the journey we have endured in 2020, the next twelve months will be an especially interesting time. There is hope, but there is still much unknown. Let’s mind travel to December 2021. Next year at this time, we may look back and say, “Of course, how did I miss that”? This activity of jumping forward to look back is known as prospective hindsight.

With vaccines on the horizon there is a lot of hope, but also a lot of questions. How long will it take to get back to normal? What additional stimulus will be provided? Will there be more economic damage before this is behind us? On one hand there are high levels of savings, pent-up demand and very low yields on cash which could be bullish for the markets. On the other hand, already high deficit levels magnified by the stimulus measures and uncertainty over vaccine distribution and effectiveness could be bearish. In short, we don’t how this will unfold. We could grow out of this fairly quickly or we could face significant setbacks.

At some point in the future however, we will look back and wonder how we missed something so obvious. That, is the power of hindsight. With more information and the future outcome known, our brains will put together the correct story. While we are undoubtedly in interesting times, we never truly know what the future holds. There are reasons, evidence, and justifications for many different outcomes. In hindsight however, the present day will all make sense at some time in the future. We will wonder how we missed it.

Twists, turns and diversions will always exist in the road ahead, just as there will always be clarity in the rear view mirror. Being an “analyst” trying to predict the road ahead seems an exercise in futility. Being a “historian” that looks back upon our enduring journey of resilience, innovation and progress seems a more sensible perspective. As such, I choose to see optimism on the road ahead.

Wishing you and your family a joyous, peaceful and optimistic holiday season.