New Year’s Resolutions for Investing in 2019Christopher Briggs, RRC®
The year 2018 will be remembered as a difficult one for the Canadian equity markets. Trade tensions and tariffs imposed by the U.S. created ongoing volatility at home and abroad. Concerns over Canada’s competitiveness have been put under the spotlight—the result of falling foreign direct investment, slowing gross domestic product growth and problems in getting our deeply discounted oil to broader markets. While the federal government acknowledged the need to support business competitiveness in its late November fiscal update, it remains to be seen how the proposed measures will help to impart change.
Despite these challenges, it is worthwhile to remember that the financial markets have faced similar situations over time and have eventually recovered to reach new highs. Longer-term investors are often at the mercy of developments that take place over the short run. Most often, we can’t do much about them or their impact on the markets. But, as investors, we can focus on the things within our control. In this time of new year resolutions and looking ahead to the future, here are some thoughts:
Trust your Plan
This is a timely reminder that Portfolio Guidelines have been put in place to help weather the inevitable periods of volatility. This may include diversification and asset allocation, rebalancing where necessary, limiting the size of any one holding, and focusing on quality holdings.
Portfolio gains do not always occur at a steady pace. Volatility in the markets remains one of the certainties of investing. While keeping expectations on an even keel may be difficult, try and focus on your longer-term objectives and keep building your investment portfolio.
Put Time on your Side
Don’t overlook the opportunity to continue saving for the future. Put time on your side and contribute to tax-advantaged accounts such as your TFSA and RRSP. A great way to build portfolios may be to turn lower prices to your advantage.
Invest in Yourself
Follow through with your New Year’s pledge to eat better or get to the gym. Taking care of yourself can pay dividends to your financial well being down the road. Consider that you may be able to work longer or reduce future health care expenditures if you stay healthy until a ripe old age. In the words of renowned investor Warren Buffett:
“anything you invest in yourself, you get back tenfold, and nobody can tax it away or steal it from you.”
As we look forward, we hope that the year ahead will be full of happiness and success for you and your loved ones.