Market volatility is neither new nor unusual. If you’re concerned about recent market behaviour, remember markets typically recover from downturns and go on to post positive overall returns.
Consider this: As of December 2010, the TSX posted a one-year increase of 13 per cent. The S&P 500 increased nine per cent over the same period1. These increases are consistent with the story history tells us: in periods after a weak market, markets have tended to offer above-average returns.
Taking action sooner rather than later can help position you to benefit from this trend.
How will you be invested?
While being hesitant about getting back into the market is a normal reaction, sitting on the sidelines can mean you could miss key periods of market appreciation — periods that can make the difference between reaching your investment goals or falling short.
If you’re uneasy about investing, here are a few things to consider.
Maintaining a long-term view and being properly diversified are two key principles for managing volatility.
Diversification can be easy to achieve. A well-diversified portfolio that is matched to your risk tolerance is something, I can help you put in place.
Select the right investment
Segregated fund polices offer several features that can help protect you from the potential risks associated with investing. I can help you determine whether insurance-based investment vehicles such as segregated fund policies are appropriate for you.
Build the right portfolio
I have access to investment tools that can help you determine the right mix of investments for your investment portfolio. I can help you make sure these decisions are based on your unique situation and your risk tolerance.
Get financial security advice regularly
It’s important to remember your risk tolerance may change over time, so maintaining contact with your financial security advisor is important. This will ensure you have the current information and advice about how to structure your portfolio to reflect your risk tolerance.
Whether you’re in the savings phase of your retirement plan or drawing an income, I can work with you to review your plan and, if appropriate, determine if there are opportunities for you to reinvest in it.
1 Source: Fun capital market facts, The Globe and Mail, Dec. 10, 2010.
A description of the key features of the segregated fund policy is contained in the information folder.