Canadian investors should adopt a diversified approach to investing during times of economic uncertainty – one that maintains a return on their investments while hedging against unnecessary risk – according to BMO InvestorLine.
Cesar Rainusso, vice-president, BMO InvestorLine, said, “Market swings – even wide ones – are a normal part of investing.
“Several factors lead us to conclude that volatility will continue to characterize the financial markets for the foreseeable future, and, while it may be difficult to watch your investments decline in value, Canadians should remain invested and keep a long-term view to ultimately reach their investment goals.”
While investors may feel uncertain about their investments during periods of market volatility, according to a recent BMO study almost half (47%) of Canadian investors believe that volatile markets present good opportunities to invest. Furthermore, respondents considered this current investing environment “the new normal,” with almost three-quarters (72%) believing that market volatility is here to stay.
BMO advises that during times of market volatility it is critical that investors not only review their portfolio periodically, but continue to look forward, stay invested and not dwell on how much their portfolio was worth a few years back.
“Temper your expectations with common sense and always avoid timing the market – a strategy that rarely works,” said Rainusso.
“Before you consider selling, review the reasons why you bought the investment; if nothing about the company has substantially changed, you may want to hang onto your shares a little longer as they may pick up.”
