It’s no secret that the spread of COVID-19 across the world has resulted in increased market volatility and decreased market values. Although this is obviously not ideal market behaviour, it’s certainly to be expected at a time when the global economy continues to shift as the world grapples with unknowns. That being said, in times of volatile market movement and economic uncertainty, it’s important to take a long-term view beyond our current shifts and remind ourselves that market movements are normal, and markets do recover.
Keep things in perspective
We have seen significant market corrections many times over the last 50 years. They can be scary, of course. The path to more stable times can be hard to see when it seems like the ground is shifting underneath you—but the good news is that every time the index has fallen over the last half-century, it eventually recovered every time. Although we’re not sure exactly when the market will recover this time, we expect it to recover eventually.
What can you do to keep a long-term view?
Trust the experts
Your mutual funds are managed by a team of professionals that have designed your portfolios to withstand these periods of volatility. Advisors are experts in balancing member needs and their long-term goals with long-term market behaviour. If you’re feeling anxious about your portfolio at a time like this, you’re not alone. Connect with your advisor and have them walk you through your portfolio to alleviate any uncertainty you may have.
Resist the urge to make changes
It’s completely natural to feel worried during a time of uncertainty. We’re all adjusting to some version of a “new-normal” and it’s okay to feel some degree of worry. The important thing to remember, though, is that making any decision when one is in an emotional state can lead to costly mistakes. There is significant evidence that major moves made in the midst of turmoil can have long-term impacts. The best thing you can do at this time is to try and keep a long-term view, and work with your financial advisor to review your portfolio and ensure you are still on course to achieve your goals.
Reflect on long-term goals
Market performance varies year-to-year, which is why it’s important to build a portfolio based on long-term goals, risk tolerance, and time horizon. Keeping your eyes on your financial future, with the guidance of your financial advisor, will help you keep your focus long-term and offer perspective into the temporariness of the market’s current volatility. Take this time to review your goals with your advisor so that they can ensure you’re still on track to achieve your long-term goals.
Your advisors are on standby to walk you through any questions or concerns about your portfolio you may have during this time. In periods of uncertainty, lean on the experts. Although it may seem difficult at times to keep your financial worries at bay, just remember you’re not in this alone.
