After a couple of relatively calm and quiet years in the stock market, volatility is back. So what can investors do to protect themselves?
1) Keep emotions out of your calls: Like most people, you see the markets go through a gut wrenching dive and think it’s time for action. Maybe you should sit in cash or make a few trades? It’s human to have these feelings. It’s likely a bad idea to act on them. Neither your intuition, nor leading experts, can predict the future. Stop. Count to ten. Take a look at market trends. We can only accurately identify a boom or bust cycle after it’s happened. In relation to those, how did your investments perform over a 3, 5 and 10 year period? This should drive the decisions you make.
2) Check your asset allocation: Your own financial needs, family considerations, and age, are a few factors that should be used to determine your risk tolerance and financial goals. It’s a great idea to diversify your portfolio between stocks, bonds, and cash at any given time. Some investment vehicles, such as a mutual fund, can do this for you. This will minimize the impact of short term swings while taking advantage of long term growth rates in the market.
3) Find a financial professional: When you’re not certain about your emotions or asset allocation, who is your sounding board to help you navigate and make rational decisions? Consulting a registered investment advisor can help you avoid costly mistakes, provide peace of mind, and recommend various investments for your portfolio.
Jeremy Ruban and Trevor Stark, in partnership with the Bradet-Simpson Investment Group at Richardson GMP, work hard to develop focused strategies to meet the unique needs of today’s investor. Richardson GMP is Canada’s leading independent wealth management firm, supported by expert tax and estate planning professionals.
If you have questions, feedback or topics you would like us to write about, please contact us at (204) 953-7850 or email Team.Bradet-Simpson@RichardsonGMP.com. You can also visit us online at www.Bradet-Simpson.com
The comments contained herein are general in nature and are not intended to be, nor should be construed to be, legal or tax advice to any particular individual. Accordingly, individuals should consult their own legal or tax advisors for advice with respect to the tax consequences to them, having regard to their own particular circumstances. Before acting on any of the above, please seek individual financial advice based on your personal circumstances. Richardson GMP Limited is a member of Canadian Investor Protection Fund. Richardson is a trade-mark of James Richardson & Sons Limited. GMP is a registered trade-mark of GMP Securities L.P. Both used under license by Richardson GMP Limited.