Understanding recent market volatility
Is it time to be afraid or opportunistic?
The markets have been going on a bit of a ride in recent days. The reason for the decline seems to be based on disappointing earnings reports of key corporations in the US, implications of tariffs and rising interest rates. For today we’ll focus on the effect of changing interest rates.
We have talked to clients over the last few years about being prepared for this normal market cycle that occurs. Thus the importance of having the proper asset allocation to ride through the market ups and downs and still be able to sleep at night. This type of market can also create opportunities. Your money manager will be looking for oversold investments and look to take advantage of mispricing. If you have cash on the sidelines that have been waiting for opportunities this may be the time to consider options.
When will the volatility stop, no one knows. The Canadian market is priced similar to back in March 2014. In some ways this could be thought of as Boxing Day for investments.
If you have any questions on how these changes may affect your financial future, do not hesitate to contact us!
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