With the markets behaving very erratically in the past few days, it’s important to put the recent developments around the coronavirus outbreak into perspective. The recent year-to-date decline of over 20 % on the major North American stock indexes follows an exceptional year for stock market gains in 2019, when the S&P 500 and S&P/TSX Composite Index rose 31 % and 23 %, respectively.
Historically, we’ve often seen major corrections following periods of intense optimism or gains of a similar magnitude. Nonetheless, it did not take long for the coronavirus outbreak to impact confidence and investors are now taking a more critical view of their future prospects.
The sudden shift in the markets also has some silver linings. Stimulated by monetary easing by the US Federal Reserve and the Bank of Canada, bond markets have had a positive start year-todate. Focusing in on Canada, the FTSE Canada Universe Bond Index is up some 3 %.
During a significant economic downturn, it may be tempting to make drastic changes to investment strategies. However, history has taught us that a well diversified and adequately structured portfolio is capable of weathering difficult periods like the one we’re experiencing now. When volatility peaks, it’s important to stay focused on your long-term goals and get sound advice about your options.
Please don’t hesitate to speak with your advisor about any concerns you might have about these recent events. Rest assured that we devote time and resources to optimizing your portfolios in view of market trends, your goals and your specific situation.
We know that this critical period is accompanied by many questions and concerns. We are doing everything in our power to ensure the continuity of our business and maintain the quality of our services to you. Our financial centres remain open, however we have implemented preventive measures to limit in person meetings. Do not hesitate to contact your DFSIN advisor by favoring virtual means of communication (such as telephone and email). Your advisor can provide advice in the current context.
Today more than ever, your DFSIN advisor is your ally.
Sources: Desjardins Global Asset Management, Bloomberg
While the information provided in this document is from sources we believe to be reliable, Desjardins Financial Security Investments Inc. cannot guarantee that this information is accurate or exhaustive. The opinions expressed in this document are based on our analysis and interpretation of this information and are not in any way intended as a solicitation to buy or sell the securities mentioned in this document.