In the past few weeks we have seen an uptick in notable newsworthy events and corresponding movement from the stock market (AKA volatility). Sometimes we get calls from clients after certain market events have made the headlines asking our thoughts on these events. We went back over our responses recently as well as reviewed some of our newsletters over the past few years and noticed a similar trend…. nothing has changed. We wrote an article back in January 2016 that outlines the major events that were happening globally that we needed to concern ourselves with the same issues moving the market in 2016 are moving the markets today and creating headlines. China, Global Debt, Trade, Iran, Brexit…..the more things change …..blah blah. Unfortunately for investors the media makes money selling advertising. In order to sell ads they need to bring readers (eyeballs) to their content. In order to bring those eyeballs to their content they prey on some of our deepest fears and you guessed it Financial Ruin is right up there with Public Speaking which I’m sure you are aware is ahead of a visit from the grim reaper. That’s not to say that we should not pay attention to what’s going on in the markets and the larger political spectrum locally and globally but we need to discern relevant from irrelevant. We do need to keep abreast of what’s happening and to be on the lookout for structural changes that would affect long term decisions. But a lot of what the media reports and tries to make a story out of is just noise. The media you may well have guessed, therefore, loves Donald Trump.
A long term well thought out strategy for investing your money is the best thing we can do to mitigate swings. There is a trade-off between risk and reward but overtime what appears risky begins to diminish significantly. We prefer to focus on the longer picture. Carefully chosen investments, re-invested dividends, tax sheltered accounts and regular conversations with your financial advisor should be part of your wealth building arsenal. With that in mind don’t forget to top up your TFSA as early in the tax year as possible in order to get the maximum benefit of tax sheltering.