Canada

Renewed concerns over global growth and ongoing geopolitical uncertainty have contributed to increased market choppiness. In the face of these challenges, you can't surrender to fear or complacency. In order to succeed, you need to make sure that your strategy is sound and purposeful.

Here are five ways that you can take action to make sure that you're investing with purpose:

Keep your portfolio balanced through active asset allocation

Make active decisions about the appropriate mix of asset classes based on your assessment of the economy, and your expectations around risk and return.

Focus on the fundamentals and keep an eye on risk

Investors who focus on “fundamentals," such as a company's earnings, are better positioned to make smart investment decisions, as are those who are mindful of both the obvious and hidden risks in each asset class.

Minimize your tax bill and optimize your asset location

You could sell investments at a loss to offset gains, time your sales to lower tax pressure and make sure your assets are located in the appropriate accounts (e.g., keeping higher-growth assets in a tax-deferred account).

Manage your expectations

The above-average returns we've seen since 2009 are unlikely to reoccur, especially in fixed income. Don't solely focus on yield — aim for a well-balanced, broadly diversified group of investments.

Prepare for gradually rising interest rates

Fixed income investors should combine both long- and short-term bonds, and perhaps also further diversify their portfolios with alternative asset classes.

“Investors who keep their eyes on their goals... are not only better positioned to navigate the changes ahead, but more likely to be rewarded with success.”
Ultimately, it all comes down to focus
Stay the course

The markets will rise and fall, but you shouldn't let unpredictable markets or big, disruptive global events distract you from your long-term goals.

Take emotions out of the equation

Have confidence in your long-term plan, knowing that it's informed by your objectives and supported by a well-balanced portfolio.

Bend, but don't break

Be adaptable to changes in the markets, but validate any changes you make with continual portfolio monitoring and due dilligence.

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