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Stay Balanced in a Hot Market - Oct 17, 2017 Since the start of the year, the Dow Jones Industrial Average has broken through 20,000, the S&P 500 has soared higher than ever and the S&P/TSX Composite Index has also reached an all-time high. That has many investors wondering where things might go from here and how to invest in a soaring market. Many people point to Donald Trump’s seemingly pro-growth policies as the reason the market has continued to climb this year. But the rally has been going on for far longer, according to Steve Rogers, Investment Strategist with Investors Group Investment Management. “The recovery from the 2008 global financial crisis has been steady,” he said. “Certainly, there have been ups and downs but when certain sectors were down others picked up the slack.” There are many reasons why the market has continued to rise over the last several years including low interest rates making stocks more attractive than low-yielding bonds and companies buying back their own stock. More recently, the gains have been driven by improved company earnings growth, which is usually the best reason for market gains. Despite the strong gains this year, the market doesn’t show signs of slowing and is likely to continue to grow for an extended period, said Rogers. “Barring political risks, I believe this uptrend will be around for two or more years at least,” he said. While every investor likes rising markets, those who haven’t paid much attention to their portfolios could suddenly find themselves in far more stocks than they had originally wanted. Say you have 50 per cent of your money in stocks and 50 per cent in bonds. As equities rise, that asset mix will start to shift. You could end up having 70 per cent of your dollars in stock and 30 per cent in bonds. Just look at how the S&P 500 has shifted since 2008. In 2008, the S&P 500’s energy sector made up 13.3 per cent of the index. As of last December it accounted for 7.6 per cent. Over that same period, the technology sector grew from 15 per cent to 20 per cent, and the consumer discretionary sector went from 8.4 per cent to 12 per cent. “With shifts like these, your portfolio definitely warrants a review,” said Rogers. It’s a much better strategy to continually rebalance your asset mix than to jump into stocks just because the market is going up. If the market falls and you’re too heavily weighted to equities, you could lose more money than you’d like. Many people are uneasy about making investment decisions on their own. That’s why it’s always a good idea to work with a professional advisor who can help you identify investment goals, develop and maintain a suitable asset mix, and select the right investments for your personal situation. Jason Blucke is a senior financial consultant with Investors Group in Kelowna. Reach him at jason.blucke@investorsgroup.com.

Keep Invested and Don't Overreact April 27, 2017 Investors dread volatile markets and, too often, their response is to jump out of investments when the market goes down and attempt to jump back in when it goes up. But it’s a historical fact that markets will always fluctuate and the price of any stock or equity mutual fund is bound to be somewhat volatile in the short term. The one proven approach for taking away much of your investment risk is simply this: time in the market. Study after study has proven that time in the market delivers much better returns than trying to time the market. Here are some recent findings in support of a long-term investment strategy. Many of the strongest market returns occur in the period immediately following a sharp decline in equity markets. Since 1950, following the worst 12-month periods of performance on the S&P/TSX, the market has made solid gains just 12 months later with only one exception. And within five years, the markets were up significantly – meeting and exceeding long-term return expectations. History has shown that economic recoveries following recessions are typically both strong and durable. In fact, periods of expansion that came on the heels of downturns averaged 57 months to close to five years. After 1960, the average period of expansion following a recession was even longer at 71 months or close to six years. Although negative returns in the short term are relatively frequent, the possibility of receiving a positive return greatly increases as the investment term lengthens. For example, between 1960 and 2015 staying invested in the market (S&P/TSX) for a year resulted in a positive return in 74.7 per cent of the one year periods while staying invested for 15 years resulted in a positive return of 100% of the time. In any one-year period, the returns of the S&P/TSX Composite Index have been as high as 86.9 per cent and as low as minus 39 per cent, a range of over 126 per cent. However, when investors diversify their holdings and invest for the long term, this volatility decreases significantly. So, as these findings once again prove, staying invested ensures you are always capitalizing on the upside of the market and reducing the impact of short-term market volatility. Most importantly, the possibility of receiving positive returns greatly increases as your investment term lengthens. Of course, having a properly diversified portfolio with the right mix of investments to matches your tolerance for risk is also key to achieving your long-term investment goals. Your professional adviser can help you do that within the right overall financial plan for you. Jason Blucke is a certified financial planner who runs a private wealth-management practice with Investors Group in Kelowna. Reach him at 250-762-3329 extension 5249, jason.blucke@investorsgroup.com or www.jasonblucke.com.