The current market volatility is unprecedented and has many people extremely concerned about portfolio declines. It is easy to say hold on, the markets will reach a bottom at some time and recover. But that does little to calm your fears... It is important to keep things in perspective – do you need all your money in the near future? If not, there is some action your advisor can recommend – if you are receiving monthly payments from your portfolio, ensure that the funds are being withdrawn from the fund declining the least or in a positive gain position: losses are multiplied when your fund is declining and you withdraw funds.
Asset classes thought of as ‘safe havens’ do not necessarily mean they do not decline – March 12/2020, the day the Dow was down 2352.60 and the S&P/TSX was down 1761.64 – a Canadian long bond index fell 2.56 % and gold fell 3.6 %1. Not all asset classes will recover at the same level, some will do better than others – your advisor can review your holdings and make recommendations. It is important that you do not stress constantly over portfolio declines – a suggestion would be to refrain from looking at your portfolio value online daily, and especially a few times daily. Unless you are withdrawing today, it is irrelevant, same as the highs were a month ago.
Do not panic, we are seeing empty shelves for items in local stores, someone sees another ‘stocking up’ which leads worry and reacting in a similar manner, which is then carried on by someone else and so on; the markets are behaving in a similar manner, someone is selling because someone else is selling and so on. If you do not need your monthly RRIF payment, delay it until later in the year. If you have cash sitting in an account earning next to nothing in interest, consider buying slowing into the market – you will look back one day and realize what a tremendous buying opportunity this was. If you have a maturing GIC and have others staggered for different times and years, consider slowly investing (even a portion of it) into the markets.
Very importantly, call an advisor today.
Carol Plaisier, CFP®, Investment Advisor with HollisWealth, a division of Industrial Alliance Securities Inc., can be reached at the HollisWealth office at 166 E. Island Hwy Parksville or by phone at 250-586-1332, by email at email@example.com, or online at www.carolplaisier.com.
This information has been prepared by Carol Plaisier who is a Investment Advisor for HollisWealth® and does not necessarily reflect the opinion of HollisWealth. The information contained in this article comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors. The Investment Advisor can open accounts only in the provinces in which they are registered.
HollisWealth® is a division of Industrial Alliance Securities Inc., a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.
Source – All data taken from historical data at https://ca.finance.yahoo.com/ DOW index, S&P/TSX index, Gold Futures and ETF ZFL BMO Long Federal Bond Index ETF.