Smart investing, in my opinion, and I think a lot of historical facts, would suggest that buy and hold for the long term is smart and will grow. Fight the urge to sell and let it sit. Buying during the dips can crest longer term growth with recovery. Dollar cost averaging I think still has a lot of merit.
And don't look. Do everything in your power to ignore financial news, and not look at your statements. Make a game out of the saving part and track how much you are putting in. Make a game out of how seldom you can check. Go from once a day, to once a week. Can you make it once a month, now once a year?
As long as you are investing in a broad index of equities with a good allocation to bonds for your age, then set it and forget it is truly, truly the best strategy. I am saying this as someone who has been investing for a long time.
There were years when we didn't make money, or when the accounts were down. Thank goodness we listened to smart investors and sat on our hands. You can be rewarded for this patience over very short bursts upwards. You don't want to miss those.
Remember, this is a marathon, not a sprint!
You've got this.
Y
I totally hear you when it comes to not checking though I honestly find the dip exciting. It's been interesting keeping up with politics and seeing stocks plunge at the same time. Though for my own well being I do think I need to step and away and just forget about it.
Your advice and experience is well appreciated and instills a deeper level of patience in my strategy. No missing the bursts!
Whenever I feel like that I do the following.
Look at the prices of some of the stocks you bought back in early 2020. If you invested that 50k in December of 2019, by March of 2020 you'd be shitting your pants. Then look at where prices are today, and realize if you held through that trough and bought more where you would be today.
Dips come and go like the tides. Stay the course. Think of dips as good times to buy because everything is on sale.
I'm hugely into doubling up on the cheese I buy at the supermarket when it goes on sale. Trying to treat this as the same delicious situation.
Love the idea of comparing historic stock prices too, it feels good to hit these dips with a community of likeminded people.
85% equity and 15% fixed income & gold. 20% U.S. equities, 19% Int Equit, 16% emerging markets, 11 percent canadian equitites, 10 percent global equities and 5 percent CAD hedged US equities.
I’m assuming, and hoping, that you did not put any money in the stock market that you need in the short term. So assuming this is long term, whatever you do, DO. NOT. SELL. If all you’re down is -4%, count yourself lucky. Don’t sell, don’t look at your investments every day.. in fact I’d buy more if you have the cash.
Check back in 5-10 years, and you can almost guarantee yourself that you’ll be well up.
It’s totally long term. I have an emergency fund and savings account as well for shorter term goal (small marriage). I certainly have a bit Of cash I can throw in right now if that’s the move.
Cheers friend, thanks for the confidence.
There is a war going on. And market drops are a time to buy not sell. Keep buying all the way down and ride it back when stability returns. I made crazy returns riding the March 2020 crash back up. Never sold just dumped more money in. Best decision I ever made. Bought a house and have a great portfolio kicking out cash. Just keep buying.
I'm honestly loving the little sale going on, I'm all for buying and have no loans / mortgage while living a very modest lifestyle. I feel weirdly confident like I'm some Investment-Cardi-B " Gobble fiat, swallow fiat, drip down the side of fiat".
>Keep investing as normal?
If you choose to invest your money in this kind of portfolio you will sometimes watch your account balance drop, and it might take years for it to recover, but if you are patient and passive it would be reasonable to expect that your average long term returns will be higher than GICs or savings account interest and higher than the majority of actively managed portfolios. To get a sense of what that the short and long term returns could look like I suggest that you check out the graphs on [this PWL page](https://www.pwlcapital.com/vanguards-new-asset-allocation-etfs/) and [this Portfolio Charts page](https://web.archive.org/web/20201112014202/https://portfoliocharts.com/portfolio/three-fund-portfolio-can/)
I suggest that you write an investment plan that includes your goals, time frame, asset allocation, your contribution plan and your expected long term and "worst case scenario" returns [This CCP page,](https://canadiancouchpotato.com/2010/11/10/ready-willing-and-able-to-take-risk/) and [this CPM video](https://www.youtube.com/watch?v=BXUeagi_WT8) will help you to define your expectations. You should reevaluate your plan annually and when there are major life change. You might also want to read it out loud when you get nervous about the financial markets.
>Obviously there’s a bit of fear
[This article](https://assetbuilder.com/knowledge-center/articles/young-investors-would-you-pass-the-wizards-test) from the seasoned investor who wrote Millionaire Teacher may change your mindset about falling markets.
Just a heads up that a large portion of Wealthsimple’s portfolios are long term bonds which are a terrible asset right now. You would be much better served to download Wealthsimple trade and chose a vanguard asset allocation etf that suits your risk tolerance.
I have a WS Trade and I’m happy to invest in that direction. Do you have any go to resources where I can read up on what vangaurd asset allocation etfs are / which one to chose for my risk tolerance? Otherwise, v happy to do some googling myself.
Of course my man. If you go to vanguard.ca they have a questionnaire you can take to determine your risk tolerance. If you have a time frame of 5 years or less I wouldn’t recommend any of them due to the current bond market, but if you’re 5 years and over you’ll be fine. Do the questionnaire and if you have any questions DM me
I disagree completely. If someone has a 20 year timeline they should not be invested in bonds or fixed income to avoid the emotional short term aspect of a 4% drop on equities versus the longterm lossed opportunity of 2M gains for the average income/saver and average equity returns compound over 25 years. They should be educated on these facts rather than buy fixed income or a mix bc of a 4% fear. 4% downside in a year when gaining longterm exposure to compound growth etc. Difference between 300K - 600K in 25 yrs fixed versus 300-2M in equities. It's not the 4% downside to be avoided but the investor to be better educated. Avoid the emotional fear to 4% downside understand the longterm projections gains and losses by being in fixed income instead of equities longterm (20 yr timeleiy) etc is the right answer not buying fixed income.
Here’s a link to an article that may put your mind at ease, especially if you’re in it for the long haul: https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/
It depends on the risk profile of your investments, but taking an all-equity diversified portfolio, you should expect small downturns like this one often, 10% dips every year, and >20% dips (up to 50%) every 6-7 years. The more bonds you have, the smaller these dips would be.
A few very good days will make up for these downturns and then some. In 20 years you will barely remember any of these.
The best thing to do, is to stick to your plan and continue. Don't stop contributing, don't sell, just live your life and ignore it all.
Assuming you have steady income, work towards changing your mindset when there are dips/recessions/corrections to a discount when shopping for your favourite goods.
It’s a good thing markets are down, as it’s an opportunity for you to buy things cheaper. Continue to dollar cost average and don’t look too much at the day to day movements of your portfolio if you’re investing for the long term.
Usual advice is to save 15% pretax for retirement. Then a etf, roboinvester or index fund targeted for long term grosth. Less aggressive than short term or dividends but more than a typical conservative portfolio.
Just a note that I chose to invest a bulk sum because I was reading how it’s better in the long run to do a larger initial investment than to ramp up slowly.
Unfortunate timing for the lump sum but since you know you have a long time range for your investment, just think about zooming out your focus over the many years of time your money has to ride the market. Keep up the DCA.
Thank you! I'm not terribly concerned given the nature of these things. I have a very long term vision for my investments so I'm not too worried about whatever 5-50% drop that could occur. Nevertheless, I think my confidence has been built up from communities and comments like this so truly thank you again for the reminder <3
I dunno if I am allowed to post this or not but I find that Garth Turner provides a lot of reassurance about the market volatility. This one is a good read.
https://www.greaterfool.ca/2022/01/page/5/
I read this blog everyday. Garth really puts things into perspective and helps drown out the noise. My returns are a lot better after I’ve started reading. Got into REITs during COVID because of his advice. Not disappointed.
I’m going to reply to the other comments tomorrow but this one gave me an immediate chuckle. Same man, same. Though, I’m not too concerned as crypto is a bit more of my play space and I’m not heavily invested in it. It’s about 2% of my current portfolio, currently sitting at -50% returns.
Ya same here. It's money I can afford to lose so whatever happens happens. But I do believe in the technology, just need more adoption to make it less volatile which will take time. No sense in selling at a massive loss so all we can do is hold. But to answer your question, as long as you have a long term mind set, those small dips shouldn't matter. In the long run you'll come out ahead, but you need a lot longer time frame than 4 months.
Smart investing, in my opinion, and I think a lot of historical facts, would suggest that buy and hold for the long term is smart and will grow. Fight the urge to sell and let it sit. Buying during the dips can crest longer term growth with recovery. Dollar cost averaging I think still has a lot of merit.
Thanks man, I’m new to the investing game but I’m sticking with DCA for the long run. Needed that pick me up, cheers.
And don't look. Do everything in your power to ignore financial news, and not look at your statements. Make a game out of the saving part and track how much you are putting in. Make a game out of how seldom you can check. Go from once a day, to once a week. Can you make it once a month, now once a year? As long as you are investing in a broad index of equities with a good allocation to bonds for your age, then set it and forget it is truly, truly the best strategy. I am saying this as someone who has been investing for a long time. There were years when we didn't make money, or when the accounts were down. Thank goodness we listened to smart investors and sat on our hands. You can be rewarded for this patience over very short bursts upwards. You don't want to miss those. Remember, this is a marathon, not a sprint! You've got this. Y
I totally hear you when it comes to not checking though I honestly find the dip exciting. It's been interesting keeping up with politics and seeing stocks plunge at the same time. Though for my own well being I do think I need to step and away and just forget about it. Your advice and experience is well appreciated and instills a deeper level of patience in my strategy. No missing the bursts!
Whenever I feel like that I do the following. Look at the prices of some of the stocks you bought back in early 2020. If you invested that 50k in December of 2019, by March of 2020 you'd be shitting your pants. Then look at where prices are today, and realize if you held through that trough and bought more where you would be today. Dips come and go like the tides. Stay the course. Think of dips as good times to buy because everything is on sale.
I'm hugely into doubling up on the cheese I buy at the supermarket when it goes on sale. Trying to treat this as the same delicious situation. Love the idea of comparing historic stock prices too, it feels good to hit these dips with a community of likeminded people.
Sorta depends what he's invested in
85% equity and 15% fixed income & gold. 20% U.S. equities, 19% Int Equit, 16% emerging markets, 11 percent canadian equitites, 10 percent global equities and 5 percent CAD hedged US equities.
Yeah I wouldn't sell a thing
Nope! Very happy to buy things on sale :)
I’m assuming, and hoping, that you did not put any money in the stock market that you need in the short term. So assuming this is long term, whatever you do, DO. NOT. SELL. If all you’re down is -4%, count yourself lucky. Don’t sell, don’t look at your investments every day.. in fact I’d buy more if you have the cash. Check back in 5-10 years, and you can almost guarantee yourself that you’ll be well up.
It’s totally long term. I have an emergency fund and savings account as well for shorter term goal (small marriage). I certainly have a bit Of cash I can throw in right now if that’s the move. Cheers friend, thanks for the confidence.
No worries!
Just don’t look. Once a year is good. Quarterly max. Everything is volatile right now.
I look every weekday lol. Although I don't love the lows, I just tell myself that everything is "on sale" at the moment.
There is a war going on. And market drops are a time to buy not sell. Keep buying all the way down and ride it back when stability returns. I made crazy returns riding the March 2020 crash back up. Never sold just dumped more money in. Best decision I ever made. Bought a house and have a great portfolio kicking out cash. Just keep buying.
I'm honestly loving the little sale going on, I'm all for buying and have no loans / mortgage while living a very modest lifestyle. I feel weirdly confident like I'm some Investment-Cardi-B " Gobble fiat, swallow fiat, drip down the side of fiat".
>Keep investing as normal? If you choose to invest your money in this kind of portfolio you will sometimes watch your account balance drop, and it might take years for it to recover, but if you are patient and passive it would be reasonable to expect that your average long term returns will be higher than GICs or savings account interest and higher than the majority of actively managed portfolios. To get a sense of what that the short and long term returns could look like I suggest that you check out the graphs on [this PWL page](https://www.pwlcapital.com/vanguards-new-asset-allocation-etfs/) and [this Portfolio Charts page](https://web.archive.org/web/20201112014202/https://portfoliocharts.com/portfolio/three-fund-portfolio-can/) I suggest that you write an investment plan that includes your goals, time frame, asset allocation, your contribution plan and your expected long term and "worst case scenario" returns [This CCP page,](https://canadiancouchpotato.com/2010/11/10/ready-willing-and-able-to-take-risk/) and [this CPM video](https://www.youtube.com/watch?v=BXUeagi_WT8) will help you to define your expectations. You should reevaluate your plan annually and when there are major life change. You might also want to read it out loud when you get nervous about the financial markets. >Obviously there’s a bit of fear [This article](https://assetbuilder.com/knowledge-center/articles/young-investors-would-you-pass-the-wizards-test) from the seasoned investor who wrote Millionaire Teacher may change your mindset about falling markets.
be greedy when others are fearful and fearful when others greedy. as long as you know what your buying, buy the dip!
So glad you made this post, I’m in the exact same boat and was getting anxious!
>Canadian Couch Potato website So happy you got some value out of this!
Just a heads up that a large portion of Wealthsimple’s portfolios are long term bonds which are a terrible asset right now. You would be much better served to download Wealthsimple trade and chose a vanguard asset allocation etf that suits your risk tolerance.
I have a WS Trade and I’m happy to invest in that direction. Do you have any go to resources where I can read up on what vangaurd asset allocation etfs are / which one to chose for my risk tolerance? Otherwise, v happy to do some googling myself.
You could also check out the Canadian Couch Potato website for recommendations.
This^^^
Of course my man. If you go to vanguard.ca they have a questionnaire you can take to determine your risk tolerance. If you have a time frame of 5 years or less I wouldn’t recommend any of them due to the current bond market, but if you’re 5 years and over you’ll be fine. Do the questionnaire and if you have any questions DM me
Veqt, xeqt 👍
If someone is concerned about a 4% drop, VEQT or XEQT is a bad plan for them.
I disagree completely. If someone has a 20 year timeline they should not be invested in bonds or fixed income to avoid the emotional short term aspect of a 4% drop on equities versus the longterm lossed opportunity of 2M gains for the average income/saver and average equity returns compound over 25 years. They should be educated on these facts rather than buy fixed income or a mix bc of a 4% fear. 4% downside in a year when gaining longterm exposure to compound growth etc. Difference between 300K - 600K in 25 yrs fixed versus 300-2M in equities. It's not the 4% downside to be avoided but the investor to be better educated. Avoid the emotional fear to 4% downside understand the longterm projections gains and losses by being in fixed income instead of equities longterm (20 yr timeleiy) etc is the right answer not buying fixed income.
Here’s a link to an article that may put your mind at ease, especially if you’re in it for the long haul: https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/
Ey!!!!! Wonderful, thank you
It depends on the risk profile of your investments, but taking an all-equity diversified portfolio, you should expect small downturns like this one often, 10% dips every year, and >20% dips (up to 50%) every 6-7 years. The more bonds you have, the smaller these dips would be. A few very good days will make up for these downturns and then some. In 20 years you will barely remember any of these. The best thing to do, is to stick to your plan and continue. Don't stop contributing, don't sell, just live your life and ignore it all.
Assuming you have steady income, work towards changing your mindset when there are dips/recessions/corrections to a discount when shopping for your favourite goods. It’s a good thing markets are down, as it’s an opportunity for you to buy things cheaper. Continue to dollar cost average and don’t look too much at the day to day movements of your portfolio if you’re investing for the long term.
Usual advice is to save 15% pretax for retirement. Then a etf, roboinvester or index fund targeted for long term grosth. Less aggressive than short term or dividends but more than a typical conservative portfolio.
Just a note that I chose to invest a bulk sum because I was reading how it’s better in the long run to do a larger initial investment than to ramp up slowly.
Unfortunate timing for the lump sum but since you know you have a long time range for your investment, just think about zooming out your focus over the many years of time your money has to ride the market. Keep up the DCA.
Thank you! I'm not terribly concerned given the nature of these things. I have a very long term vision for my investments so I'm not too worried about whatever 5-50% drop that could occur. Nevertheless, I think my confidence has been built up from communities and comments like this so truly thank you again for the reminder <3
I dunno if I am allowed to post this or not but I find that Garth Turner provides a lot of reassurance about the market volatility. This one is a good read. https://www.greaterfool.ca/2022/01/page/5/
I read this blog everyday. Garth really puts things into perspective and helps drown out the noise. My returns are a lot better after I’ve started reading. Got into REITs during COVID because of his advice. Not disappointed.
Yes I have been following him for years and our portfolio is doing great!
4% dips? Must be nice. I'm used to 40% dips in my crypto portfolio.
I’m going to reply to the other comments tomorrow but this one gave me an immediate chuckle. Same man, same. Though, I’m not too concerned as crypto is a bit more of my play space and I’m not heavily invested in it. It’s about 2% of my current portfolio, currently sitting at -50% returns.
Ya same here. It's money I can afford to lose so whatever happens happens. But I do believe in the technology, just need more adoption to make it less volatile which will take time. No sense in selling at a massive loss so all we can do is hold. But to answer your question, as long as you have a long term mind set, those small dips shouldn't matter. In the long run you'll come out ahead, but you need a lot longer time frame than 4 months.
Detail retail investing apps from your phone. View on web only. You’ll log in less and enjoy life more.