The Bumpy Ride Continues

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Stock market volatility continues. The broad US market, as measured by the S&P 500 index is off 14% year to date. This isn't fun for any investor but this level of market decline is perfectly normal and quite common. The more volatile, tech heavy Nasdaq index is down 24% since the beginning of the year while US dividend stocks are collectively down about 10%. Canadian stocks have faired much better with the S&P/TSX 60 index down only 2.4% so far this year and many dividend stocks up on the year (VDY is up 6%).  

Unfortunately, as interest rates have spiked higher, bonds have performed poorly (VAB is down 10% this year). The good news is that bonds, bonds funds and GICs are now offering much higher yields. For example, 2 year GICs are available at rates around 4%. 

Lots of "experts" are predicting further market declines while many others see current levels as an excellent buying opportunity. No one truly knows where stocks will go in the short term but, as I have said before, I believe stocks will do what they have always have done: move higher over time. Long term investors who have stuck it out and ignored panicky markets have always been handsomely rewarded. I do not see why this time will be different. Living with market volatility is the price we must pay to have the opportunity to earn a good return over time.

I recently had a conversation with Robin Powell, a UK based journalist, film maker and investor advocate. Please take a quick look at this 3 minute YouTube Video.....I think you will find it quite timely!

If you have any questions or comments, just email me at larry@larrybates.ca.
 
Larry

Investment Advice for Affluent Canadians
Some investors prefer ongoing advice. I offer full-service, ongoing investment advice and financial planning for clients with portfolios of $1 million+. My clients benefit from greatly reduced fees and portfolios which are tailored to match their personal objectives, time frame and risk tolerance. If my service might be of interest to you, just reply to this email and we can set up a call to discuss.

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