Skip to content

My 100% Advice bank • March 06, 2020
modified on June 11, 2021

COVID-19 and market volatility

Risk or opportunity?

Decorative image: a group of people in front of various stock market indexes in blue.

The events of the past few weeks have taken a toll on stock markets worldwide, resulting in a significant pullback over the past several days. How should you react to fluctuations in the market?

As the mainstream media emphasize dips in the stock market, keep in mind that your fund managers continually monitor your savings and optimize their strategies to address changing economic conditions. You can always reach out to your advisor to talk this process through. Occasionally, situations of this type can represent an opportunity to achieve your goals more quickly.

Some tips to guide you through times of economic uncertainty:
  • Ignore market noise
    Losses on shares only materialize when you succumb to panic and sell off your positions.
  • Stay focused on the long term
    When bear markets do occur, they are intense and short-lived. Over the long term, the current volatility will pass. Downturns, corrections and even bear markets are normal features of stock market cycles.
  • Avoid panic selling
    Investor overreaction is typically motivated by fear and is responsible for the biggest investment mistakes. If you have any questions about the current situation, talk them through with your advisor and take another look at your investor profile and portfolio. Your advisor is a professional who is capable of combining an understanding of your goals with a comprehension of market realities.
  • There are bargains on the markets
    As the legendary Warren Buffet once said, "Be fearful when others are greedy and greedy when others are fearful."
The current virus isn't the first and won’t be the last.

Four other events have raised global health concerns over the past 20 years. In each instance, an initial period of panic is followed by concerted action undertaken by world governments and a gradual return to normal. As this graph demonstrates, the effects of these unfortunate episodes fade over time:

If you have any questions, talk them over with your advisor.

LBC Financial Services firm team Inc.

Popular articles

My 100% Advice bank

How's your financial health?

August 21, 2019

My advice

4 good reasons to contribute to your TFSA

December 03, 2020

My advice

Investment Series - Taking advantage of your RRSP

February 11, 2020

My 100% Advice bank

New telebanking services designed for you!

November 16, 2020

My 100% Advice bank

New program to help you buy your first home

October 18, 2019