News Releases

Canadian investors might be feeling queasy as a result of the rollercoaster performance of the stock market, but before you think of jumping off the ride, remember that investing, especially for retirement, is a long-term discipline.

WHAT:
Developing a financial plan and a well-balanced portfolio using the principles of asset allocation and diversification is the best defence against market volatility. However, according to a BMO/Ipsos Reid study, more than half (55%) of Canadians aged 45 to 60 indicated that they either don't have a financial plan or it resides in their head. In addition, almost half of respondents (48%) believed their RSP is their financial plan. With this lack of planning, some Canadians could be in for a rough ride.

WHY:
Stock markets have historically rebounded from their corrections over time. For example, in the final months of 1987, the S&P/TSX Index fell by about 25 per cent, and all of that loss was recovered in just over a year. In September 2000, the S&P/TSX was at 11,388 and dropped to 5,695 in October 2002. It is now over 12,000.

Remaining in the market rather than getting out when times are tough or attempting to capitalize on an upswing, will ultimately help Canadians achieve their retirement goals. Trying to time the market can be costly – only a few days out of the market may have a dramatic impact on your long-term growth. For example, take an investment of $10,000 - if it was fully invested for 15 years it would now be worth $55,570. On the other hand, if you missed the top 60 days in the market, it would only be worth $10,593.

No one can predict when the market will go up or down, but a financial planner can provide advice on how to protect your portfolio against short-term volatility and help take the emotion out of investing.

WHO:
BMO Financial Group has national and regional experts available to speak about what investors should be doing this RSP season in the midst of the current volatility.

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