Living in this mountain paradise we often find ourselves enjoying the best life outdoors rather than having a healthy financial situation. The ultimate goal—of course!—is to find that perfect balance between fun and funds. My name is Laura Wierzbicki, Consultant at IG Wealth Management (Investors Group Financial Services Inc.). This is my first of many finance columns. I hope to make comprehensive financial advice easy and accessible with a few hundred words each month.
At any time of the year, it can be tough to set aside money to invest – either in your investments held in an RRSP or to add to your other portfolios – and that is especially true in the wake of your holiday season spending. Then there’s your assessment of the ‘state of the market.’ Will it go up? Will it go down? Should I invest now or should I wait?
These are all valid questions, of course, but there is one simple answer: Make your investments now. Here’s why.
It’s impossible to time the market – just ask any knowledgeable investment professional. Trying to hit a high return and avoid a low one by jumping in and out of the market is a sure way to curtail your returns. Time in the market is a better path to investment success. That’s because of this historical truth: Markets always move up and down but the long haul trend is always up. So, stay true to a long-term investment strategy for higher long-term returns.
For most investors, the best long-term strategy is to make your investments immediately, regardless of whether the current market is up or down. Even better, invest regularly instead of holding off and making a lump sum investment once a year – because, by investing regularly, you will accomplish these important investment goals:
You get the full benefits of dollar cost averaging – meaning you make your investment purchases (by acquiring more units of investments held in an RRSP or purchasing non-registered stocks).
Regardless of whether the current price is low or high. Over time, the average cost of your investments will be lower and your potential for longer-term returns will be higher.
You maximize the value of your investments held in an RRSP. Your money grows tax-deferred inside your RRSP. By making regular contributions, the magic of compounding can add thousands to your retirement fund. Here’s an example: Contribute $200 a month to your investments held in an RRSP (at an average compounding return of 5.5 per cent) and you’ll have $128,407 after 25 years. But if you make a single lump sum contribution each year near the RRSP deadline, your 25-year accumulation will be only $122,766.
Especially at this time of year, it’s difficult to find a lump sum to invest – but at any time of year, it’s much easier to come up with $100-200 a month through a Pre-Authorized Contribution (PAC) plan that automatically invests an amount you choose in investments you choose.
Sleep easier by always looking at the big picture. Don’t worry excessively about the performance of one investment. View your investments from the perspective of your overall portfolio and your long-term goals.
By investing regularly and using a balanced investment strategy, you will achieve your financial goals. Your professional advisor can help design the plan that’s best for you.
Laura’s advice comes with 10 years’ experience in financial services. She offers comprehensive, fully customizable financial strategies and solutions, working one-on-one with business owners, retirees, families, and individuals focused on building their net worth. Don’t hesitate to reach out for a holistic approach to investment solutions, insurance products, and mortgage planning.
Trademarks, including IG Wealth Management and IG Private Wealth Management, are owned by IGM Financial Inc. and licensed to subsidiary corporations.Investors Group Trust Co. Ltd. is a federally regulated trust company and the mortgagee. Mortgages are offered through I.G. Investment Management, Ltd. Inquiries will be referred to a Mortgage Planning (Agent) Specialist.
This column, written and published by Investors Group Financial Services Inc. (in Québec – a Financial Services Firm), and Investors Group Securities Inc. (in Québec, a firm in Financial Planning) presents general information only and is not a solicitation to buy or sell any investments. Contact your own advisor for specific advice about your circumstances. For more information on this topic please contact Laura Wierzbicki | Consultant | IG Wealth Management
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
