A couple of local investment professionals say the wild swings on stock markets last week generated a lot of questions from clients. Markets have been in a volatile state over concerns about the Chinese economy and over when the United States may start raising interest rates from historically low levels.

Kristine MorgaKristine Morga is Manager of the Wealth Management Department at Steinbach Credit Union. She says their phones were busy last week as clients had plenty of questions.

"We certainly have not been seeing a panic but investors are looking to our wealth consultants and investment advisors for some guidance and to see, with the recent volatility in the markets, what kind of impact this can have to their personal portfolios. So, a lot of questions, a lot of trying to filter through the noise and just looking to put things in perspective."

 

 

Dwayne Doroshuk, a Financial Planner at RBC Steinbach, says he too fielded a lot of questions about the markets. He adds it's important for people to stay invested and be patient.

"Someone who maintains perspective and stays mindful of their investment time horizon tends to have a better chance of reaching their investment goals than those who maybe react to short term fluctuations. Another important thing is to maintain discipline. So sometimes reacting to short term noise in the market, by making dramatic changes, moving in and out of the markets, can have a negative impact on a client's long term portfolio."

Doroshuk says, historically, markets generally recover from a volatile market in the short to medium term.

Morga notes a volatile period like this is also a good time for people to review their investments.

"Given that it has been some time since we have experienced this level of volatility and that we have been in a historically low interest rate environment, perhaps investors have perceived that they can take on a little bit more risk. So a correction is a great time to assess whether any adjustments need to be made, either geographically or amongst different asset classes."

Dwayne Doroshuk

Both Doroshuk and Morga say a market correction, as has been happening, is a normal aspect of a healthy bull market and is a chance to make sure fundamentals remain intact and that excessive valuations are removed.

Doroshuk says this past week serves as an important reminder to investors.

"Make sure that your investment risk is aligned with your portfolio. And, for individuals who are in need of cash, let's say heading into retirement years or are in retirement, drawing income, it's always important to build in an income protection in each of your individual portfolios so that, in the event of market ups and downs, you've got some added security."