Business as usual.
There are alternatives to the
stress of market volatility.
Business as Usual.
We live in an increasingly volatile financial world and often feel that the stress of this fact is out of our control - the truth is that volatility is a fact of life, but it's not entirely out of control.
As an analogy lets quickly discuss aging - we are all affected by this.
We know that a healthy lifestyle will allow us a smoother transition while aging. Diet, exercise, down time, passion for life...these are all factors that help eliminate stress and allow our bodies to age gracefully, yet some of us chose not to. There are some of us who have chosen a more difficult path - and this can lead to an increasingly volatile experience in aging. This is where we often hear the phrase, "If I only knew then what I know now..."
This is the moment that we realized we had a choice. Many of us use this moment to enact change in our lives. And this realization is no different when looking at how you will manage your financial future.
Market volatility is a fact of life, and just as we see in aging, there are choices we can make to ease the stress this creates. This month we have seen major indices take a significant loss, including the TSX reporting the largest single day loss in 3 years. Highlighting a few performance numbers gives us a clear perspective on how investors who have chosen 'traditional' portfolio strategies saw a significant increase in the stress of their financial health. They took a difficult path.
Between October 3rd and October 11th the S&P 500 was down 6.7%;
From recent highs to October 11th the TSX 60 was down 7.1%
Investors have taken losses in bonds as US 10-year rates moved from 2.82% to 3.23%
Rising rates create losses for bonds already issued at lower rates
The WealthCo Asset Management Medium Risk Portfolio endured a correction of only 0.6%.
A 'Healthier,' well-constructed, and diversified portfolio is an alternative plan to mitigate financial stress. There is a place for exposure to equities that trade in the stock market despite the current low rates, as well as a place for higher quality bonds - all with a focus on diversification. Our investment philosophy kept the allocations to stocks and bonds moderate enough that market events we saw this month did not create stress through the increased volatility.
As you can see by our third quarter performance, the investment philosophy we have works.
Staying the course.
Individual and institutional investors, including the Canada Pension Plan (with more than 50% allocation noted in their 2018 Annual Report) recognize the benefits of adding alternatives and the important part they already play in the global economy. This suggests that the level of interest in alternative investments will continue to increase. Investors looking to preserve their wealth, and at the same time secure their and their family’s financial future, benefit from having a well-diversified portfolio that includes alternative investments.
Our investment philosophy works.
And our third quarter performance shows it.
There are Alternatives. Start the Conversation.
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WealthCo is a corporate group that includes, WealthCo Planning Services Inc. and WealthCo Risk Management Inc. and WealthCo Asset Management Inc. Investment Management services are provided under WealthCo Asset Management. That firm is registered as an Exempt Market Dealer in the provinces of Alberta, British Columbia, Manitoba, Saskatchewan and Ontario. It holds a Portfolio Manager license in the provinces of Alberta, British Columbia, Manitoba and Saskatchewan and an Investment Fund License in the province of Alberta. The information in this website is directed to individuals registered in those provinces. The information provided here is for general information purposes and should not be construed as providing advice. WealthCo has not independently verified any information set out herein. Any opinions set out herein are subject to change and WealthCo does not undertake to notify the reader of such changes.