Economic uncertainty and market volatility can feel overwhelming, especially when it comes to your savings, investments, and long-term financial goals. With headlines constantly shifting—rising inflation, fluctuating interest rates, and unpredictable markets—it’s natural to feel uncertain about the future.
The good news? You don’t have to navigate it alone. Working with a Mainstreet Credit Union and Aviso Wealth Wealth Management Advisor ensures you can stay on track, make informed decisions, and feel confident about your financial future. In fact, we’ve anticipated events like this may happen. The plan we set up for you is agile, and our investment recommendations are resilient and aligned with your financial goals–both short-term and long-term.
Understanding Market Volatility & Investing During Economic Uncertainty
Markets rise and fall—it’s part of the natural economic cycle. However, when we experience periods of increased volatility it can be tempting to react emotionally by pulling out of investments or making sudden changes to financial plans. While these reactions are understandable, they can sometimes do more harm than good.
As illustrated below, Bull Markets (positive returns) have consistently exceeded Bear Markets (negative returns). Regularly discussing your personal risk tolerance and risk capacity with your advisor is essential to ensuring our investment recommendations are the right fit for you.
But economic uncertainty isn’t just about the stock market. It also affects:
- Inflation: Higher prices can reduce purchasing power and affect your ability to save.
- Interest rates: Rising or falling rates can impact mortgages, loans, and investment returns.
- Job security & income stability: Uncertain economic conditions may influence employment and career planning.
Understanding how these factors affect your financial plan is crucial, and working with an advisor helps you stay proactive rather than reactive.
Why Financial Planning Is More Important Than Ever
During times of uncertainty, a well-structured financial plan provides stability. It allows you to focus on your long-term goals rather than reacting to short-term market movements. A Mainstreet Credit Union and Aviso Wealth Wealth Management Advisor will help you:
Assess your financial situation: Understanding your income, expenses, and assets is key to making informed decisions. Using a cash flow management software, such as this free one from the Government of Canada, can help you stay on track, understand your required expenditures, and be prepared for any unexpected situations.
Manage risk effectively: Diversification and asset allocation strategies can help protect your wealth. By diversifying your portfolio across different asset classes (Canadian Equity, Global Equity, and Fixed Income for example), you can achieve greater consistency in returns and protect yourself against market volatility.
The Quilt Map below, showcases the annual performance of various asset classes over time, highlighting that no single asset class consistently outperforms others every year. By diversifying investments across various asset classes, you can better manage risk and aim for more stable long-term returns.
Stay disciplined with your investment approach: Avoiding any emotional decisions by reacting to the financial market today helps keep your long-term financial goals on track. Historically, stock markets have rebounded from selloffs, with some of the best days coming on the heels of the worst; so, it typically pays to remain invested through volatile times.
Plan for different economic scenarios: Your advisor can help you prepare for inflation, interest rate changes, and unexpected life events. Historically, despite many periods of increased volatility, markets have remained resilient.
In the illustrations below, there is an example of investing $10,000 in 1989 and staying fully invested in the S&P 500 index until 2024. Listed to the right are various economic events that created uncertainty, the resulting market decline, and returns 1 and 2 years later. The annualized return over the 35-year period of 11.48% resulted in portfolio growth to just over $448,000, reinforcing the need for a long-term focus. Investing during economic uncertainty requires sticking to your financial plan and ensuring it is up to date.
Now Is the Time to Take Action
Rather than letting uncertainty create stress, take a proactive approach to your financial future. Schedule a financial review with one of our advisors today to:
- Gain clarity on your current financial position.
- Explore strategies to protect your wealth and maximize opportunities.
- Ensure you’re prepared for whatever the economy may bring.
Let us help you build confidence in your financial future. Book an appointment with a Wealth Management Advisor today. Your financial well-being is too important to leave to chance.
Let us help you build confidence in your financial future—no matter what the market does.
Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc. Online brokerage services are offered through Qtrade Direct Investing, a division of Aviso Financial Inc. The information contained in this article was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This material is for informational and educational purposes and it is not intended to provide specific advice including, without limitation, investment, financial, tax, or similar matters.