My Account is Down, What Should I Do?
I had a great newsletter all prepared and ready to go out, but in the last few weeks, I have been fielding calls and doing interviews about the current state of the market and the values of accounts. The same questions keep coming up:
" Should we make any changes? Go to Cash? "
The answer to both of those is an emphatic NO.
If we make any changes now, we risk locking in the losses we've seen across stocks and bonds.
If we go to cash, with inflation at 7.7%, we lose purchasing power, which is still a loss.
On top of that, what if we make changes or pull out RIGHT BEFORE THINGS TAKE OFF?
Many studies have shown that not being invested for even 10 of the best return days can reduce your long-term portfolio growth by 60% (take a look).
So, what should we do? The simple answer is to ride it out. I know it's not the sexist answer but long-term returns tend to be positive so....
If you are still adding money to your RSP or TFSA, don't stop. Actually, add more if you can since everything is "on sale".
If you are taking money from your RIF, chances are we have a portion set aside in cash to cover 3-6 months of payments. This should level out the ups and downs.
If you want to have a closer look at your accounts, call our office or schedule a meeting online by clicking the button below.