Wealth Strategies

Retirement

The past few years have certainly provided investors with a lesson in the ups and downs of financial investing. Markets fell sharply in the fall of 2008 and continued to quickly lose value until finally, in March 2009, they hit bottom and started to climb back upwards. No matter where you were invested, values were impacted. No region, investing style or type of investment product was immune. History tells us that markets always go up after they go down – and visa versa. But the dizzying speed and depth of the decline had many investors rattled – and in fact, many investors continue today to be anxious about investing their money in stocks and bonds.

But for the long-term investor, it is crucial to keep emotions in check. After a big drop in 2008, Canadian markets were up over 30% in 2009 and finished higher again in 2010 by more than 14%. If investors had continued the disciplined strategy of investing in their RRSP on a regular basis, they would have bought more investments at historic lows and then watched them grow in value – thereby reducing the overall impact of the down turn. In fact, most investors who held onto their Canadian equity market investments throughout the downturn recouped their losses by the end of 2010, demonstrating the importance of investing for the long-term. If they are retirees taking income and had been practicing the disciplined strategy of having two to three years worth of income in guaranteed investments, their income - and therefore, lifestyle – would not have been impacted.

But when things look like they are declining, the media is in a panic, and everyone is running for the hills, it is very difficult to maintain a disciplined investing strategy. That's where the advice and guidance of a professional financial advisor is absolutely crucial to investors.

A financial advisor can help clients stay on track through different market cycles by educating and reassuring them that their long term strategy is sound.

Investors need to get off the fence this RRSP season and speak to their financial advisor about where the investing opportunities are this year. Hiding money in a sock drawer or under a mattress won't get anyone closer to their retirement dreams.

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