What Are the Golden Rules of Investing?

As an investor you’re likely getting used to market volatility as a fact of life, like it or not. One day up, one day down, and a few more sideways. It reminds me of an epic mountain bike ride I did back in June in Whistler. The run was called ‘Kill me, Thrill me’ and it did just that! The ride started with a little climb, and then a little down, and then a big climb, followed by another dip! This continued on for about 2 hours but eventually we made it to the top! The markets often do that to us, they ‘kill us’ and then they ‘thrill us’. One moment going down (which is always fun on a bike, not so fun in the stock market) and then the next moment grinding up (which is never fun for me on a mountain bike, but it sure feels great when the stock market climbs up).

The stock market does not operate in a vacuum unrelated to world events, so investors like you and I need to be prepared to deal with volatility of all types. Being prepared for the unexpected is the key; the reason I wear my bike helmet every time I ride is not because I plan on crashing, but rather I’m prepared in the event that I do crash.

The Golden Rules

I think it would be helpful to revisit the key points below, or as I like to refer to them, “The Golden Rules” about investing in the markets :

* Maintain a long term perspective. While your investments may experience volatility over the short term, no one can dispute the fact that equity markets provide the best opportunity for long-term growth and wealth accumulation. Patience pays off.

* Stick with your investment goals. Don’t tie your financial investments to the headlines; the key to success is to maintain discipline and long term focus. Emotion, although understandable, can be misleading.

* Diversify! By investing in more than one market or fund, you become less vulnerable to volatility (the ups and downs in the stock market).

* Don’t panic. Sitting tight and riding out the storm will pay-off, versus bailing out. A decision made in panic is a decision you’ll regret.

One of my key responsibilities as your advisor is to help you make the smartest possible decisions about your financial lives – not just your investments! This means making myself accessible to you as your personal sounding board during times of uncertainty. There is a ton of noise in the marketplace at the moment and I understand that it can be overwhelming in times like these. There is no need for you or anyone you care about to feel alone. If you ever have any questions, or want to go over your portfolio, never hesitate to contact me and we’ll arrange for a meeting.

Enjoy the rest of your summer ( hopefully the sun is here to stay) and I look forward to meeting with you in the fall!

For those who are interested, I have a great article that was just released from our research department which outlines the US Debt situation. If you’re interested in learning more about the crisis, drop me an email at afransen@dundeewealth.com and I will send it to you.



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Aaron Fransen   CFP® , CHS, CPCA   |   CERTIFIED FINANCIAL PLANNER®, Investment Advisor   |   Suite 203 - 15350 34th Avenue, South Surrey, BC V3S 0X7   |   Tel: 604.531.0022