Recession Risk: When The Central Bank Stops Being Boring

The Bank of Canada’s monetary policy should be boring. Like a hockey or soccer referee, people shouldn’t notice it. If they do, it usually means a contentious decision has been made. Interest-rate policy and inflation figures shouldn’t be the main topic of discussion around an average family dinner table.

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2023: Building on a better base for investors

Investing money at its most basic is just delayed consumption. Putting $250 away versus buying another pair of shoes simply means you can buy those shoes at some point in the future. It makes sense then that the baseline goal of investing is to protect the purchasing power of your money.

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Keep Calm and Plan For Volatility

Keeping your nerve when you see minus signs on your portfolio statement is not easy. Throw in a global pandemic, the rising cost of living, interest rate hikes, and a news cycle of war and political division, and it’s little wonder many investors want to exit the market and hunker down until the good times return.

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Pandemic Legacy: How Have Investors Been Affected

How the COVID-19 pandemic alters the path of history remains to be seen. Like a retiree looking back over their life, it’s only in hindsight that they can fully process the impact of euphoric highs and devastating lows. The great events of history are similar; they shape people and societies.

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Inflation … what does it mean?

Gordon Gekko hasn’t done the investment industry’s reputation any favours. Michael Douglas’ unscrupulous movie character quickly became shorthand for all that is wrong with Wall Street and financial markets with his infamous ‘greed is good’ speech. But you don’t have to look too far away from the big screen to see real-life examples of people whose actions have perpetuated the link between the wealth industry, untrustworthy characters and get-rich-quick trades.

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Volatility and Staying Invested

Imagine you’re on a long-haul flight and the pilot informs you of every hint of turbulence. It would drive every passenger crazy. Thankfully, instead, most of us watch a movie, grab some uncomfortable sleep, and wait until the plane’s wheels hit tarmac. Ignorance is bliss. Yet, when it comes to the financial markets, investors absorb daily blow-by-blow accounts of price drops, stock bubbles, and geopolitical-induced volatility. This can influence decisions and emotions, and lead to panic selling – and often panic buying – that harms your portfolio.

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Why Sitting Out Of Risky Markets Is A Bigger Risk Than You May Realize

Behavioural psychologists often talk about “loss aversion” or “negativity bias”. Both phrases essentially mean that people experience loss more intensely than gains. In other words, for every dollar you lose, you need to get back two to offset the emotional pain. Everyone talks about the fear of missing out, but the fear of losing is just as real.

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Ukraine Invasion: Where do Investors Stand?

Vladimir Putin is not the first Russian dictator to send chills down the spine. A trawl through the quotes of his predecessors reveals often terrifying ideological one-liners, including Lenin’s prescient, “Sometimes, history needs a push.”

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Taming, Not Timing, the Markets

During long periods when markets remain calm, many retail investors are lulled by the slow and steady upward movement in the value of their portfolios. These are the times when the adage, “time in the market, not market timing, determines performance”, that seems to ring true. However, when volatility rises, often these same investors turn away from “buy-and-hold” and become interested in market timing.

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Understanding Volatility

If you’ve ever paddled a canoe on a calm lake only to get caught in a sudden squall of rough waves, then you’ve experienced volatility. When it comes to investing, volatility occurs when a “storm” develops rapidly and sends prices shooting up or down in a dramatic fashion.

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