December 2018 saw one of the worst declines in the stock market in recent memory. As the market declined, I was more disappointed in the investors who sold off their shares than the ones who stayed invested. Trade wars and political instability have helped to increase volatility, and events like this trigger sell offs. Even so, historically markets have bounced back and continued to grow.
Are you a saver or are you an investor?
Savers are individuals who believe that they can get a steady increase in the money they deposit and never see a decline. Investors believe if they put money in the stock market, they’ll see a greater return than simply saving their money in a daily interest account or a GIC. Investors are willing to see temporary drops in their portfolios to potentially realize greater long-term gains.
Investing in funds that invest in top companies has historically been one of the best ways to help grow wealth - Have you ever wondered why this is true? Stock market indexes, like the Dow Jones Industrial Average, has 30 of the top companies in their portfolio. Fund managers are constantly looking for good companies to add to their portfolio. When one company is dropped, a better one is added.
One of my biggest responsibilities as an advisor is to teach my clients the value of investing and helping them through the highs and lows of the stock market emotions. In most cases, advised households grow their wealth better than non-advisor consulting households. Did you know that households with income levels between $35,000 and $55,000, had nearly 5 times the level of investable assets as compared to non-advised households? 1
So where should you invest your money?
Well if the past is any indicator, funds that invest in stock market may continue to be the best place. All mutual funds come with a level of investment risk. Depending on your investment profile and comfort with risk, I can recommend investment options that are suitable for your investment goals.
1. IFIC The Value of Advice: Report of July 2010
Important information about mutual funds is found in the Fund Facts document. Please read this carefully before investing. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. Unit values and investment returns will fluctuate.