Comfort level with investments key during volatile markets

OTTAWA - Few investors have escaped the carnage on the stock markets this year as the bears have taken over the Toronto exchange.

See Full Article

But for those closing in on retirement and those already there, the downturn may be even more frightening as the value in Canadian investment portfolios invested in stocks have taken a beating.

Pace Sturdevant, a retiree in Ottawa, says "it's been depressing."

"They've lost so much value that's basically the only thing to do is sit tight and wait," he said of his portfolio of stocks.

Sturdevant, 67, is keeping a close watch for any dividend cuts by companies in his portfolio of mostly dividend-paying stocks.

"It hasn't happened so far," he said.

The S&P/TSX composite is down about 20 per cent from his highs of last year, putting it in bear market territory.

Sturdevant knows he hopefully has another couple of decades of retirement to pay for, so he has time on his side.

That doesn't make the losses any easier to take, however.

"I sold one stock that was a strong sell and I bought some stocks that have tanked," he said.

The turmoil on the markets has amounted to a painful lesson for those close to retirement about the importance of balancing risk in their portfolios.

Peter Bowen, vice-president of tax and retirement research and solutions at Fidelity Investments, says investors need to start by asking themselves why they're investing.

"If it's for a house, that gives you a different answer than if it's for retirement, and if it's for a car, well yet again - a different answer," he said. "The investment time horizon is one of those key inputs to the strategy, in addition to the individual's goals and their tolerance for risk."

Bowen says bear markets can serve as a litmus test for investors and their risk tolerance.

"If they aren't sleeping at night because of their concerns about their portfolio, maybe they've overstated that risk tolerance," he said.

Generally, the closer you are to spending your investments, the more conservative your portfolio should be.

Brent Vandermeer, portfolio manager at HollisWealth, says that while most of his clients have balanced portfolios, they span the spectrum from 100 per cent in fixed income to a handful fully invested in stocks.

"My job is to manage the money that they give me within the parameters of what they are comfortable with," he said. "If it is the right thing for the client and we've really talked and walked through it, that's what I think my role is."



Advertisements

Latest Economic News

  • Ikea readies its first East Coast store, touted as Canada's most sustainable

    Economic CTV News
    HALIFAX - Ikea is getting ready to officially open its first Atlantic Canadian store this week as thousands from across the region are expected to descend upon the popular Swedish furniture chain's new Halifax-area location. Source
  • Striking GM CAMI workers awaiting response to weekend contract proposal

    Economic CTV News
    TORONTO -- The union representing 2,500 striking workers at GM Canada's CAMI assembly plant in Ingersoll, Ont., says the company has yet to respond to a comprehensive proposal put forward on the weekend. Unifor spokesman Mike Van Boekel says he expects it will take General Motors of Canada, which owns the plant, about a day to analyze the costs of the proposal. Source
  • Trudeau urges Canadian companies to seek fortune in China's $5 trillion market

    Economic CTV News
    TORONTO -- Prime Minister Justin Trudeau is urging Canadian small- and medium-sized businesses to look beyond Canada's borders and explore the US$5 trillion retail opportunity in China. Trudeau is speaking at a Toronto conference today hosted by Chinese e-Commerce giant Alibaba, with politicians from all three levels of government in attendance. Source
  • American business group says loss of free trade with U.S. would be a big concern

    Economic CTV News
    OTTAWA - A new report says potential changes to NAFTA and a loss of free trade with the United States represent the biggest concerns for a number of big American firms operating in this country. Source
  • French truck drivers block roads to protest labour changes

    Economic CTV News
    PARIS -- French truck drivers staged road blockages near fuel depots across the country Monday to protest against President Emmanuel Macron's changes to labour laws. Two major unions, CGT and FO, called a nationwide protest action because they fear the new rules Macron formally signed last week will lead to a deterioration in working conditions and ease the firing of workers. Source
  • Alibaba launching payment processing service AliPay in Canada

    Economic CBC News
    E-commerce giant Alibaba.com is launching its mobile payment service AliPay in Canada. The service allows Alibaba customers to use AliPay to easily pay Canadian merchants who sign up for the program. Alibaba is by far the most popular online sales website in China, and AliPay allows Chinese customers to buy products from abroad without any difficulties with currency conversion. Source
  • New Uber CEO apologies for company's past mistakes, vows change

    Economic CBC News
    The new CEO of Uber offered contrition for past mistakes on Monday, just days after London's transport authority said it would scrap the company's operating license. Dara Khosrowshahi issued a letter to London's Evening Standard newspaper acknowledging the company "has got things wrong along the way" as it expanded. Source
  • Uber CEO apologizes to London users for company's mistakes

    Economic CTV News
    LONDON -- The new CEO of Uber offered contrition for past mistakes on Monday, just days after London's transport authority said it would scrap the company's operating license. Dara Khosrowshahi issued a letter to London's Evening Standard newspaper acknowledging that the company "has got things wrong along the way" as it expanded. Source
  • Cenovus reaches agreement to sell Suffield assets for $512M

    Economic CTV News
    CALGARY - Cenovus Energy Inc. (TSX:CVE) says it has reached an agreement to sell its Suffield crude oil and natural gas operations in southern Alberta to International Petroleum Corporation for $512 million in cash. A release from the Calgary-based oilsands company says the sale, which includes Cenovus' properties on Canadian Forces Base Suffield and the adjacent Alderson property, is expected to close in the fourth quarter, subject to closing conditions. Source
  • NAFTA talks becoming 'a little more heated,' says Canada's chief negotiator

    Economic CBC News
    U.S. trade negotiators will only partially unveil new text on modifying a key chapter on investment under NAFTA, two well-placed sources said on Sunday, underlying the cautious pace of talks that are supposed to wrap up by the end of the year. Source