These are some common concerns investors have expressed over the past few months. We’ll explore these concerns in a 5-part email series covering key areas such as market timing, diversification, managing risk, managing market emotions and the benefits of regular investing.
Understanding investment risk
Current events such as Europe’s energy crisis, rising interest rates and inflation have given clients the perception that the global financial system is more fragile than previously believed. With volatility and sentiment like that, it is no wonder clients are nervous about the markets. The willingness to take on risk has been fundamentally altered.
Understanding investment risk is more critical than ever before. When clients understand the size and shape of investment risk, and how much they are willing to be exposed to, you can help them adopt a strategy best suited to their needs.
Looking at the S&P/TSX Composite Total Return Index over 3 and 5-year rolling return periods, we see a pattern of positive returns begin to appear. Each green square represents a positive period; blue represents a negative period.
Source: Morningstar Research Inc., as of November 30, 2022
This suggests that clients may have a higher potential to realize a positive outcome given even a little bit of time.
This concludes our 5 reasons to stay invested email series.
Segregated Fund contracts are issued by The Empire Life Insurance Company (“Empire Life”). A description of the key features of the individual variable insurance contract is contained in the Information Folder for the product being considered. Any amount that is allocated to a segregated fund is invested at the risk of the contract owner and may increase or decrease in value. Please read the information folder, contract and fund facts before investing. Past performance is no guarantee of future performance. All returns are calculated after taking expenses, management and administration fees into account.
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