As we look ahead to a new year, the sense of uncertainty many of us feel today may not be entirely new. While Canadian consumer sentiment recently turned negative, and the number of times “uncertainty” appears in the Canadian press reached its highest level since the pandemic,1 consider that we’ve been here before.

Those studying human behaviour suggest that if we look at the archives from almost any year, we will find the perception that in that moment it was an unusually uncertain time. Of course, this isn’t meant to downplay the current challenges. Many are struggling with a higher cost of living, economic conditions at home are softening and we’re likely to see lagging effects of the rate hikes, all contributing to today’s feeling of uncertainty. However, we may be susceptible to an “uncertainty illusion.” In the present and looking to the future, we rightly sense that we are living amid profound uncertainty. In hindsight, when the past is known, things often do not appear so bad.2

Economically speaking, one perspective comes from reflecting on generational shifts. For many years, the Millennials faced a bleak future, projected to be the first generation worse off financially than their parents. Recent statistics, however, paint a different picture. Millennial household income is now higher than previous generations at the same age: $9,000 more than the median GenX (1965 to 1979) household income and $10,000 more than the Baby Boomers (1946 to 1964), in 2019 dollars. As they enter their peak earning years, the Millennial future looks bright, indeed.3

Similar patterns occurred with GenX and Boomers. Just 30 years ago, there were dire predictions about the economic prospects of GenX, who entered the workforce in a recession compared to the Great Depression. Unemployment rates hit 11 percent in the early 1990s after interest rates were aggressively raised to fight inflation.4 Likewise, many Boomers entered the job market in the 1970s, a period plagued by stagflation — significant inflation and unemployment — and low economic growth, as well as a stagnating stock market. Let’s not forget that in 1979, the front page of BusinessWeek magazine declared the “Death of Equities.”5 And yet, the Boomers have lived through one of the most fortuitous financial lifecycles in history.

A significant lesson from economic history? “The past wasn’t as good as you remember, the present isn’t as bad as you think and the future will be better than you anticipate.”6 This, too, has lessons for wealth building. Investing $100,000 in the S&P/TSX Composite Index amidst the uncertainty of the 1990s would have yielded $628,274 today, or $1,318,766 with dividends reinvested.7 Since the “Death of Equities,” the S&P 500 Index Total Return has grown by over 8,000 percent;8 the publishers would later admit, “Not bad for a corpse!”4 This, despite many uncertainties along the way including adverse macroeconomic events such as recessions, financial crises, inflation, stagflation — and even wars. Yet, participating in this growth meant having confidence in brighter days ahead.

As we begin a new year and navigate the uncertainties of today, continue to look forward. Let the lessons from the past be a reminder of the prospect of brighter days ahead.