By the Sun Life team
Stock markets go up and down. But is it beneficial to hold on to your investments when the needs go down? Yes. Here’s why.
Since the onset of the pandemic made its first ripples, no investor has escaped market volatility*.
The appearance of new variants, inflation or rising interest rates: all of this can cause the stock market to fall.
When stock markets are falling, it’s only natural to want to take action to mitigate volatility. You may be inclined to sell your investments or change your portfolio, but this is not necessarily the right thing to do if your portfolio is already diversified1.
“If your portfolio is diversified and your financial goals haven’t changed, the best thing to do is to keep your investments. It pays to be patient,” says Suzie Labbé, Sun Life’s advisor.
Content of the article
Why keep your investments when the markets are volatile?
What happens if you sell your investments in market troughs
How do you stay on track with your financial goals when the markets go down?
Why keep your investments when the markets are volatile?
Because markets are used to recovering.
Why is the stock market falling? All kinds of events have caused volatility in the past. That said, looking in the rearview mirror, we see a trend emerging.
Indeed, Ms Labbé affirms that the market has always recovered from setbacks following significant events such as Black Monday in 1987, the dot-com bubble between 2000 and 2003 and the financial crisis from 2007 to 2009.
“In all these events, a cycle is emerging. Volatility increases, markets go down, and markets go up. With volatility high right now, the first thing to remember is that your investment is a long-term investment. If you have a diversified portfolio and your goals haven’t changed, your best bet is to stay invested. Let the market and your portfolio rebound. »
