What Can You Do In Times Like These

No one likes what is happening to the stock market right now.  Losses are piling up with the TSX down almost 10% in the last year - and that is the good news – the S&P500 is down almost 23% in the last year, the NASDAQ is down over 34%, and the Dow Jones is down “only” 12%.    If you talk to your broker, the likely advice is to hold, don’t panic, and ride it out. So, what can you do to protect your assets and preserve your capital – or is it too late to do anything?

Over the next few weeks, we’ll discuss several ideas that might help weather the storm.  This is not investment advice - but take this as idea sharing which may warrant further discussion with your financial planner, or a new set of eyes on your situation.

The first priority – stay calm! Adjust your perspective. Right now, investors are probably seeing red as their portfolios struggle to stay in the black and frustration mounts. But remember, the markets have recovered after every downturn, eventually. The S&P 500, a measure of the top 500 publicly traded companies globally, is up 44% over the past five years, including this year’s downturn and the pandemic related drop in 2020.

As Ben Felix PWL Capital says: “time in the market is better than timing the market.” The worst mistake an investor could make in times like this is to sell their portfolio. Hoping to time the bottom of the market is statistically more likely to result in missed investment gains than by avoiding losses. If anything, investors should be encouraged to increase savings as stocks are trading at a ‘discount’ when prices drop. More bang for your buck, as they say.

Hopefully, this gives you a little peace of mind for now, as markets may continue to struggle for a little while. Over the next month we will discuss other possibilities to make navigating the markets more manageable. Please reach out to Stride Business Works with any questions about your personal financial situation, small business or tax requirements. Stay tuned for the next blog!

Contributed by Dale Hein, CPA and Alex Hein, CFP