Fall Update 2018
Considering recent market volatility we wanted to update you with our perspective as well as a couple of articles that we have recently read that we thought would be of interest to you.
With regards to markets, it has been a number of years since we have seen declines in equities and in fixed income at the same time. 2018 has been such a year. Most global stock markets including the Canadian market have experienced small declines throughout the year. Steady and continued interest rate increases in Canada and the United States has hurt fixed income investments as well as dividend paying stocks. All of this translates to difficulty earning a suitable return from a balanced portfolio this year.
Many of our clients are wondering what can be done to improve portfolio performance.
Our answer is for clients to continue to take the long view and to ignore short term fluctuations in markets. We are disciplined Investment Advisors. We do not believe that emotional reactions to current market events adds any valuable benefit or extra return potential to client accounts.
Soon enough, interest rates in Canada will stop going up, bonds will perform better than they have this year, and stock market volatility will subside.
In general, while the bull market in stocks that we have enjoyed over the past decade is getting old, we do not see any imminent threat of a recession or a major collapse in stock prices. Economic activity around the globe remains robust and corporate earnings are strong and growing.
While 2018 has not been a great year so far for investors, it is hardly a bad year either. These years do happen from time to time. Expect them and you won't be caught off guard when they do come along.
To use an old adage, there are times when you simply don't earn any returns from the market.
Please let us know if you require any information about your investments or how we may be able to assist you as we navigate our way to better days ahead.
Jamie C. Hodgins, CIM FMA FCSI
Senior Investment Advisor