Hello everyone, 

I wanted to touch base with you and offer my take on the current market situation.  Everybody has an ‘opinion’ as to what is going on. For the most part, they are as right or wrong as the market decides.  What is important to understand is that the financial markets are extremely complex, possibly beyond human comprehension.  This opinion may be somewhat unnerving, to say the least, and we know that there is never an easy fix whether by government or central bank intervention.

The good news, and here is my opinion, is that the market operates rationally as a function of supply and demand as it always has.  Irrational human and institutional investor behaviour is what creates the short term volatility.  The long term upward trend is due to the ingenuity and productivity of humans who continue to create value for others.  I personally do not see that this will change this time any more than in previous ‘crises’.

Most of you are hanging in there and I applaud your courage in facing down the doomsday scenarios that you read, hear and see every day, or choose not to read hear and see as the case may be.  I know that you are all concerned and I don’t have the ‘right’ answer for you.  Perhaps the most important consideration is ‘how long do I hold on?’  Will I protect myself by getting out now?  I, personally, plan to stay invested as I have done in past ‘crises’.

We have a process at Informoney which uses your current data as a prognosis for your future and we track your performance.  For the few of you who have contacted us, the reality is much better than the assumption.  In other words, your portfolios are doing better than what the media would lead you to believe. 

We hope by your next meeting that there will be some positive outcome from the current turbulence.  In the event that the pressure is too great, we can deal with the reality of your situation by updating your plan.

Best regards.

Russell Schmidt, Bsc., M.Ed., CFP

Senior Financial Planner

INFORMONEY FINANCIAL PLANNING