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Global tensions have plenty of investors watching their portfolios a little more closely this week, but one Saskatchewan wealth adviser says the worst mistake people can make at a time like this is to panic.
Andrew Rodych, a portfolio manager and partner with Q Wealth Partners, as well as a partner and wealth adviser with PWM Private Wealth Counsel, said the market swings tied to the conflict involving Iran are real, but not unusual in the bigger picture of investing.
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“There’s always a reason to sell,” Rodych said. “But if you’re a long-term investor, this kind of volatility because of macroeconomic or political factors should not be the reason why you’re necessarily exiting or rebalancing or changing your portfolio approach.”
Rodych said the past week had brought the sharp back-and-forth movement that tends to makes investors nervous.
“We usually talk about the concept of market volatility, and we’re certainly seeing that,” he said. “Anybody that’s been following the markets, they’ve probably been seeing a combination of some jitters, where we’ll get a positive day followed by some negative days, and bigger swings, more than a percentage point either way.”
For younger investors, he said the best policy is to keep the long-term time horizon in mind.
“If you’re a long-term investor, volatility is part of the game. It’s risk and reward, right? There’s that trade-off,” Rodych said.
The financial adviser said investors who felt uneasy looking at their accounts should use that feeling as a sign to review their overall plan, rather than a signal to make quick, emotional decisions.
“If you’re uncomfortable with the amount of volatility you’re seeing, then it might be a time to reevaluate your financial plan,” he said. “Are you well diversified? Do you have diversified global exposure?”
He said that advice is especially important for people nearing or past retirement, because they may be drawing income directly from their portfolios.
For those investors, one of the biggest “don’ts” was pulling money from the wrong place at the wrong time.
“If you are withdrawing from a portfolio, ideally equities or stock market participation, that’s probably not where you want to be withdrawing right now, when volatility starts spiking,” Rodych said.
Instead, he said retirees and near-retirees may want to lean on safer, more liquid holdings while markets settle.
“This might be a time to be using money market or HISA high-interest savings account type positions, and withdrawing from those while we let the volatility settle in the stock and the bond markets,” he said.
Rodych also warned against thinking this kind of turmoil is unprecedented. He pointed to past market shocks, including the COVID-19 crash in 2020 and major tariff-related volatility last year as reminders that markets have been through times of uncertainty before.
“We experience volatility in the markets, in our societies, in our politics, in our economics, and this is just the part of investing that we have to work through,” he said.
In the end, Rodych said the clearest dos and don’ts are simple: don’t panic, don’t make knee-jerk changes, and do make sure your portfolio actually matches your goals, timeline and tolerance for risk.
“If folks are looking at their portfolio, they’re seeing this volatility, and they’re comfortable with it, that means that they’ve got a good plan in place,” he said. “They’re feeling well diversified for the different scenarios that can come along.”
