John Georgescu | CFP, PFP, CIM, FCSI

Wealth Advisor | SunCu Financial Services Inc.
Associate Portfolio Manager | Qtrade Advisor

Navigating market volatility - Top 3 tips for investors

With recent geopolitical and economic events, investors are understandably concerned about their financial future. Here are three important tips to keep in mind during these uncertain times:

Think long-term. That might sound easy enough, but the challenge lies in ensuring this long-term perspective isn’t turned upside down based on short-term events. For instance, someone just 1-2 years away from retirement may be tempted to sell investments during market volatility, believing the short time frame of their retirement date won’t give them enough time to ride out the volatility. It’s important to remember, however, that their investments need to provide income and last for 20+ years in retirement, a substantially longer time frame than events in the near term. It's normal to feel nervous when the value of your investments goes down, but keeping a long-term perspective can help you stay calm and remain focused on the horizon rather than at your feet.
Have a plan and stick to it. That doesn’t necessarily mean a comprehensive 25-page plan. Still, everyone should have a blueprint of their financial future and understand the variables involved, both those they can control and those they can’t. The plan is amended when major life events happen, like a new job, new baby, or new house, not when McDonald’s shares drop because investors are concerned about Ozempic’s impact on McDonald’s bottom line. In other words, the former should lead your decisionmaking, while your financial advisor is tasked with analyzing the latter. Your financial plan also helps you with the first point - focusing on achieving your longterm financial goals and maintaining an investment portfolio diversified enough to navigate short-term volatility.
Remain disciplined. Mark Twain once said, “History doesn’t repeat itself, but it often rhymes.” This is a powerful quote that can be applied to many different circumstances, though in my humble opinion, most aptly with regard to the market. While details and circumstances change, similar events eventually recycle. Investor sentiment is not entirely dissimilar from the 2008 Great Financial Crisis or, more recently, the 2020 COVID pandemic. In hindsight, each volatile event was an opportunity for long-term capital appreciation for patient and disciplined investors. Five years from now, we’ll look back at this recent volatility similarly. Downturns aren’t fun, and it can be difficult to ignore the emotions telling you to forget the fundamentals and do something drastic. Market downturns are normal, and so are market recoveries. Stick with the basics: Keep saving, follow your plan, and don’t underestimate your timeline.

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