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Stay the Course in our Volatile Market

Posted on January 24, 2008 at 6:14 pm 
Filed Under Financial Markets, Financial Planning, Investment Planning

With all the volatility the TSX experienced since early last week, many investors are moving to a cash heavy portfolio.

It is no surprise at all that many Canadians are moving to cash. After all, the ups and downs in the market can be scary and sometimes even overwhelming.  For those nearing their retirement, it can be down right petrifying. The question we must ask is “Are we staying the course and following our original long term plan?”

Your Take-Away: Rob Carrick wrote yet another great article on the importance of going back to basics and reviewing your initial long term plan. After all, if you stick to your plan there is no question that you understood the market would fluctuate. The benefit to choosing the funds and in turn the portfolio you chose was that you believed the long term benefits would out weight the short term volatility. Does that sound familiar, even fair?

There is no question that the volatility we’ve seen in the last week or so has caused many to wonder what the future holds. I also think it is very fair to be frustrated or a bit nervous when your portfolio seems to be shrinking. After all, we are all human and choosing how to invest our money is not only an academic or technical decision, but also a very emotional one.

My encouragement is this. The markets will probably continue to bounce around for the next little while, but rest assured that with the bad comes the good. In fact, if there was no such thing as a bad market, there would be no such thing as a good market because we’d have nothing to compare it too. 

Step back, take a look at your long term plan, and realize you made sound financial decisions back then which means you can sleep easy and simply enjoy the ride up!

Until next time, have a Terrific Tuesday.

Chris

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