When market volatility strikes it creates a sense of panic for investors and a strong sense of uncertainty. There is also a feeling of uneasiness with the markets and a desire to move to safer options. We have always cautioned clients to stick with a discipline and to not stray from your allocation dramatically as history has shown us that investors are more likely to reach their long-term goals if they remain invested and avoid short-term decisions that may take them off course.

 

Staying the course during market volatility is often difficult for
many investors. Unfortunately, these investors are often buying high and selling low—and miss the rallies that follow the challenging periods. Staying invested through all market conditions is a time-tested strategy that has shown to pay off over the long-term.
It’s inevitable there will be ups and downs in the market, but staying committed to your long-term investment goals can mean more money in your pocket for retirement.

 

Now if we look at some probabilities with regards to the returns of the S&P 500 since 1929. As you can see the value of staying invested in the markets outweighs trying to time the markets as nearly 80% of the time the markets were going to continue to move positively. I am not suggesting at all that investors should not try to be tactical or strategic within industries and asset classes but merely illustrating that staying invested and having a disciplined strategy is effective. I have attached an interesting probability chart courtesy of Manulife Investments. 

 

Source - Manulife Investments- How to Survive a Bear Attack

 

 

 

As we head into June we will be hosting our next educational session and it will focus on how you can use life insurance as a key part of your wealth management plan. Please feel free to check the events section of my site for details on the session and if you are interested in attending please do RSVP.