10/03/2025
The U.S. recently implemented a 25% tariff on Canadian goods, heightening trade tensions with our largest economic partner. Over my seven years in the financial industry, I’ve witnessed significant market fluctuations. The year I started in the industry, 2018, the stock market experienced a downturn. In 2020, during the COVID-19 pandemic, we saw one of the steepest declines in over 30 years, followed by another downturn in 2022. Despite these fluctuations, history has shown that markets rebound, often with their strongest gains occurring after periods of decline.
In 2024, Canada’s markets saw substantial growth, rising by 20%, with some index funds gaining over 30%. However, this year presents a more uncertain landscape.
Some clients have asked if I’m concerned. While the trade dispute is an unfortunate challenge, I remain confident in the market’s resilience.
Here’s why:
Successful investing isn’t about predicting short-term movements; it’s about staying invested over time. Markets follow cycles, but since the 1950s, they have risen significantly more often than they have declined. A common mistake investors make is pulling out of the market during downturns, locking in losses. 𝐈𝐧𝐬𝐭𝐞𝐚𝐝, the market downturns present opportunities where investors can buy more funds at lower prices, setting themselves up for greater returns when the market recovers.
Early in my career, I was fortunate to learn from experienced mentors who guided investors through various economic shifts. I understand the uncertainty of market declines because I’ve helped clients navigate them firsthand. During the COVID-19 downturn, we witnessed a sharp decline, but by 2021, the market had fully recovered and surpassed pre-pandemic levels. 𝐏𝐚𝐭𝐢𝐞𝐧𝐜𝐞 𝐢𝐬 𝐤𝐞𝐲 - historical data shows that markets rebound. For example, a $100,000 investment in the S&P 100 in the year 2000, left untouched, would be worth over $660,000 today. However, if that investment had been temporarily withdrawn or switched to "wait it out" during a downturn, missing the 10 best growth days, its value would be reduced to just $303,000, that's more than 50% less. This illustrates why attempting to time the market is rarely a successful strategy.
Another reason for my confidence is the quality of investments we recommend. We focus on funds with strong 10-year track records. While past performance does not guarantee future results, it remains one of the most reliable indicators available. Additionally, we prioritize actively managed funds, where professional fund managers strategically adjust portfolios to respond to market conditions, mitigate risk, and identify growth opportunities.
Diversification is another essential principle of sound investing. By spreading investments across multiple funds, industries, and global markets, we reduce exposure to any single sector’s volatility while enhancing long-term growth potential. Our approach typically involves allocating investments across three or more well-performing funds, each with a strong historical track record and international reach.
𝐔𝐧𝐥𝐞𝐬𝐬 𝐲𝐨𝐮𝐫 𝐟𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐠𝐨𝐚𝐥𝐬 𝐨𝐫 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐭𝐢𝐦𝐞𝐥𝐢𝐧𝐞 𝐡𝐚𝐬 𝐜𝐡𝐚𝐧𝐠𝐞𝐝, the best course of action remains to stay invested. Market fluctuations are inevitable, but history demonstrates their resilience over time. If you have concerns about portfolio diversification or would like a second opinion, let’s connect. The best time to invest in your future is always now.
