This Is Your Investment Brain on Pessimism

Have you been reading the headlines, viewing your investment portfolio, and assuming the worst is yet to come? Welcome to your painful crash course on what market risk really looks like—and more importantly, how it feels. Most investors say they’re ok living with periodic market risk, as long as it helps them achieve better returns over the long run. We accept (in theory) that tolerating the interim damage done to our own investment portfolios will help us meet our long-term financial goals. But that’s investment risk in theory. Since it’s been a long time since we’ve encountered an extended bear market climate, you may have forgotten or never known the reality of it. It may not have clicked then, when significant market declines happen, it is usually due to despairingly bad news … amplified by headlines screaming how things are only going to get worse from here. The reality is, when we’re in the middle of a storm of stuff, our behavioural biases make it very difficult to believe we’ll ever see better days.

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Mid-Year Observations – 2022: The Impact of World Events on Investments

There is no denying that this year – 2022 – has been a roller coaster for investors. With the geopolitical climate impacting markets, interest rates rising, unexpected high inflation and a possible recession looming… there is a lot to navigate. It’s mid-2022 and a perfect time to revisit what’s happened so far and how best to cope with the intimidating financial markets. Let’s start with the big action items that have impacted the markets in 2022…

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Time to Go on a Financial Media Diet

Stock and bond markets plummeting in tandem, the war in the Ukraine, rises in interest rates, threats of a looming recession … You’re probably already well aware of the volume of news wearing us down. As I wrote to my clients, “the financial press has gone on a feeding frenzy in response, serving up heaping helpings of negativity upon negativity.” On many fronts, times are indeed disheartening, and we’re as worn out as you are by the weight of the world. That said, there are already way too many outlets cramming worst-case scenarios down our throats and crushing investment resolve. To offset a bitter pill overdose, following are a few more nutritious news sources to reinforce why we remain confident that capital markets will continue to prevail over time, and that long-term investors should just stick to their plan.

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Six Ways a Recession Resembles a Bad Mood

There’s been a lot of talk about recessions lately: Whether one is near, far, or perhaps already here. Whether we can or should try to avoid it. What it even means to be in a recession, and how it’s related to current market turmoil. To put market and recessionary concerns in perspective, it might help to describe six ways a recession resembles a bad mood. There are some intriguing similarities!

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Investing During Wartime: How Does the Geopolitical Climate Impact Your Financial Planning?

Most of us are asking important questions about this geopolitical crisis. By no means do our financial concerns detract from the greater, human toll. That said, if I can help you remain resolute as the world justifiably severs Russia’s access to capital markets and the global economy, perhaps we can both do our part to restore justice in Ukraine. So, let’s talk about geopolitics and investing during wartime. Here are my key takeaways:

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Understanding Inflation, Interest Rates, and Market Reaction

Most investors understand or perhaps accept the fact that they are not able to time stock markets (sell out before they go down or buy in before they advance). The simple rationale is that stock markets are forward looking by anticipating or “pricing in” future expectations. While the screaming negative headlines may capture attention, stock markets are looking out to what may happen well into the future. It is easy to understand why we might be scared about the recent headline inflation numbers and concerned about rising interest. It is very important to keep this in context, which is what we will address today.

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