COVID-19: Resisting Portfolio Panic

April 15, 2020

 

I wanted to reach out to as many clients as possible during these tumultuous times to help you cope with the financial ramifications that volatile markets may be having on your portfolios. As the COVID-19 global response continues to unfurl, there will be more uncertainty. Governments and scientists cannot predict the course of the virus, and so to, financial experts cannot specifically predict the full path of the economic future, but you have a professional to help you navigate these times.

Open for Business

I want you to know that first and foremost, you are my priority. Echelon Wealth Partners, was well prepared to weather an event of this magnitude, having implemented a company-wide emergency preparedness plan a full week ahead of any Canadian mandatory isolation and non-essential business closures. As such, our technology and communications capabilities have fully allowed us to work from home and support our clients without interruption. In Ontario, Echelon is considered an essential service and that is expected to be mirrored elsewhere.

Do Not Panic

Many people are fearful of the financial ramifications and may have questions and I understand that. My first piece of advice, however hard it may be to hear, is especially important for those that are not close to retirement; try to ignore the market fluctuations and stick with the plan that we have previously agreed upon.

Research has shown that the average duration of a bear market is less than one-fifth of the average bull market, and while the average decline of a bear market is 28%, the average gain of a bull market is over 128%.

The bigger risk for investors is not the next 28% decline in the market, but missing out on the next 128% gain in the market. (Richard Best, 2020)

Retirement Alterations

For those that are about to retire within the next two to three years, or have already retired, we may need to reassess your specific situation. I am attempting to reach out to those clients on a daily basis and connect as soon as possible by phone. Feel free to call me for a consultation if you feel concerned about your nearing or current retirement plan.

Possible solutions could include holding off retirement for a short period of time, being flexible in order to wait until better market conditions return. It would also be wise to limit spending and rely on emergency savings before touching your main retirement savings, and do not attempt to time the market to exit equities in this type of volatility.

For further questions, feel free to contact me by phone or email.

Sincerely,

Steve McBride

 

Disclaimers

This blog is solely the work of Steve McBride for the private information of his clients. Although this author is a registered Investment Advisor with Echelon Wealth Partners Inc. (“Echelon”) this is not an official publication of Echelon, and this author is not an Echelon research analyst. The views (including any recommendations) expressed in this newsletter are those of this author alone, and they have not been approved by, and are not necessarily those of, Echelon.

Echelon Wealth Partners Inc. is a member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund.

Forward-looking statements are based on current expectations, estimates, forecasts and projections based on beliefs and assumptions made by authors. These statements involve risks and uncertainties and are not guarantees of future performance or results and no assurance can be given that these estimates and expectations will prove to have been correct, and actual outcomes and results may differ materially from what is expressed, implied or projected in such forward-looking statements.

The opinions expressed in this report are the opinions of this author and readers should not assume they reflect the opinions or recommendations of Echelon Wealth Partners Inc. or its affiliates. Assumptions, opinions and estimates constitute this author’s judgment as of the date of this material and are subject to change without notice. We do not warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Past performance is not indicative of future results.

These estimates and expectations will prove to have been correct, and actual outcomes and results may differ materially from what is expressed, implied or projected in such forward-looking statements. Echelon Wealth Partners Inc., its divisions, subsidiaries, and affiliates, do not provide any income tax advice and does not supervise or review any income tax returns. Please consult your accountant.

Sources:

https://www.investopedia.com/articles/investing/021116/3-reasons-not-sell-after-market-downturn.asp