Market volatility is an inevitable part of investing. While periods of turbulence and trade wars can be unsettling, they also present opportunities for long-term wealth creation.

Here's how we're using current market volatility to achieve our long-term objectives with our disciplined RBC Private Investment Management (PIM) discretionary wealth management program:

1. Tactical adjustments: In our September 2, 2024 update, Taking our foot off the gas pedal in the short-term, we discussed our tactical asset allocation shift out of S&P 500 equities (led by AAPL, NVDA, MSFT, AMZN, META, GOOGL, TSLA) and into short-term fixed income, US large-cap dividend growers, and low-volatility sectors. Protecting capital and proactive risk management are key to navigating uncertainty. This tactical shift has reduced volatility during the current market drawdown and it will create an opportunity for us to strategize and rebalance this allocation as valuations improve.
2. Long-term perspective over short-term noise: In times of market turmoil, it's easy to react emotionally. History has shown that markets recover, and staying invested outperforms timing the market. We focus on long-term fundamentals rather than short-term fluctuations.
3. Alternatives allocation: A well-diversified portfolio helps reduce risk by spreading capital across different asset classes and geographies. In particular, our Alternatives allocation across every client account is 24%. The key objective of allocating to Alternatives is diversification, risk management, enhancing returns, and liquidity. When equities come under pressure, we rely on our Alternatives allocation to reduce volatility. For a refresher on our Alternatives philosophy, refer to our October 23, 2023 blog post.
4. Leveraging opportunities in volatile markets: Volatility often creates inefficient asset pricing and opportunities for long-term investors. By maintaining an unemotional and rational view of financial markets, we can position portfolios to benefit from eventual market recoveries.
5. Keeping clients informed and empowered: Transparency and communication are key during uncertain times. We provide regular market insights, portfolio updates, and strategic recommendations to ensure our clients are informed.

Market volatility can be unnerving, but by maintaining a disciplined approach and making calculated adjustments, we continue to safeguard and grow our clients' wealth. If you'd like to discuss your portfolio strategy in today's market, we're here to help.