We’ve all heard the saying “We’re living in volatile times…”. In fact, this has been a common saying throughout history from the Roman Empire in 27 BC through the Medieval Period, the French Revolution and both world wars in the 1900’s.
In the 21st century the market has fluctuated with its own version of volatile times. Yet the markets have always pulled out ahead, including after the following events:
- Dot-Com Bubble Burst (early 2000’s)
- 9/11 (2001)
- Subprime Mortgage Crisis (2008)
- Energy Crisis (2014/15)
- Financial Crisis (2018)
- Current Pandemic (Present)
History lessons are exciting. As you fast forward to the mid 1900’s, financial volatility indicated that riskier investments generated higher returns but also a higher incidence of losing money faster. This definition still seems to persist today, but I believe that the definition has expanded to correlate with opportunity. In other words, to optimize returns in a volatile market an investor should seek to minimize the risk while maximizing the returns.
I’ve only skimmed the surface of economic cycles in my examples above, but the moral of the story here is that volatility doesn’t have to be a bad word. Financial volatility can create opportunity as long as you are comfortable with your risk tolerance and willing to stay the course despite the economic cycles. It is helpful to reflect on the growth opportunities that we have experienced in the last 10-20 years, and specifically the past 24 months. At Connect Wealth, our focus has not shifted as we continue to partner with Investment Counsel firms in Canada who support us, and most importantly, our clients. Our collective aim continues to be to build a strategic portfolio with a concentrated approach on stocks and bonds with the goal of beating competitive benchmarks.
As you meet with your Financial Advisor during this RRSP season and continue to experience volatility in the days/months/years ahead, remember that at Connect Wealth we have your best interests in mind. Information is key and conversations together are the root of building towards your financial goals. We appreciate you and are thankful for your trust and support in our team at Connect Wealth.
Connect Wealth is an independent financial planning firm that offers holistic advice to clients based on their current goals and future aspirations. We use well-established workflows and cutting edge technology to maximize planning efficiencies while simplifying the process for clients. Learn how you can maximize your financial opportunities at www.connectwealth.com.
