“It was the best of times, it was the worst of times.” If you’re a fan of Charles Dickens, this line might ring a bell. It was taken from “A Tale of Two Cities” which was published in 1859. Although it doesn’t compare to the current marketplace; it does focus on the French Revolution which was a time of global decline of monarchy under the dictatorship of Napoleon. I won’t dive any deeper into the historical upheaval of France, which is when this book was based.
It was the line that drew my attention based on the past 60 days that we’ve experienced in the markets. In December 2018, the S&P 500 was down 9% and the Dow was down 8.7%, which was the worst December since 1931 (Great Depression). In my opinion, it’s the worst December ever as it’s hard to compare our world to the Great Depression. On the flip side, in January 2019, the S&P 500 was up 7.9% and the Dow was up 7.2%, which was the best January since 1987. In turn, I am calling this the best January ever as the US was coming out of a recession in the 80’s which lead to “Black Monday” in October 1987. It’s merely the time-frame that I am focusing on as a lot has happened in a matter of 60 days, compared to any other 60 day time period.
When you go from the worst December to the best January to one of the best RRSP seasons ever, that, in turn, defines market volatility. Now that RRSP season is behind us, I thought that I would share some of the returns that we’ve experienced in the past two months. Here are year-to-date returns for three of the main stock exchanges that we follow on a day to day basis:
When you put these together, you can build a rolling average return utilizing what’s called the S&P/TSX Composite Index, and this return was 9.95%. Considering we came off a fairly rough December, we’ve officially recouped some, or most, of our losses from 2018. I expect that the pressure of volatility is on the rise as we continue down the path of 2019. It is important to remember that volatility is not something to shy away from; there are benefits to staying the course and managing through the ups and downs.
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The Registered Disability Savings Plan (“RDSP”) is one of the least talked about Registered Savings Plans on the market today. To be honest, this plan is becoming more recognized because the Government of Canada is marketing the plan for Canadian’s with a disability. In the past, RDSP’s have flown under the radar; however, throughout the past year, more and more people have been asking about it.
It is a little more complicated than your typical RRSP or RESP.
Would you be surprised to learn that the stock market has out performed real estate in Vancouver over the last decade? According to the MLS Home Price Index , which began collecting data 11 years ago, real estate prices throughout the greater Vancouver area have grown on average from 100bps in January 2005 to 187.75bps in January 2016. This growth represents a 5.89% annualized rate of return and a total return of 87.75%.
How to safeguard your retirement…
Have you ever been scuba diving? With scuba diving, you need to plan your dive, how long, what depth, do you have the right gear, etc. If you make a big mistake there are no do overs, it could cost you your life. Retirement planning is similar, you only get one shot at it and the difficulty is, people will only do it once in their lifetime. Fortunately, as a planner we get to experience retirement many times over as we walk alongside our clients.
For people that are in the building phase (ages 30-55) and those that are in their final approach to retirement (ages 55-65), it is crucial to make sure that certain key elements have been looked at. Read more
Singer Olfert Financial group
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