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1. Look Past the Headlines
Negative headlines and market volatility can make it tempting to alter a well-designed investment plan. While selling off your portfolio may make you feel better, this decision could mean lost opportunity and not achieving your long-term investment goals.
| Year /Event | Return (%) | Return in Following Year (%) | Next 5 Years Average Return |
|---|---|---|---|
| 1990 Gulf War | -14.8 | +12.0 | +10.8 |
| 2002 Tech Wreck | -12.4 | +26.7 | +18.3 |
| 2008 Financial Crisis | -33.0 | +35.1 | +11.9 |
2. Follow these Principles
Stay disciplined with these five principles of sound investing:
- 1. Invest Early
- 2. Invest Regularly
- 3. Invest Enough
- 4. Diversify
- 5. Have a Plan
3. Adjust Your Plan as Needed
Your investment plan should be dynamic, not static. Here are three “levers” that can be adjusted over the years to meet your changing needs.
Concerned about not having enough money to meet your goals? Consider adjusting how much you contribute on a regular basis. Even a small increase can have a significant impact long-term.
You can extend or shorten your investing time horizon based on your needs. For example, postpone retirement or re-enter the workforce if you want more time to build your wealth.
This lever should be shifted carefully as your risk profile is core to your investment plan. The best way to do this is to review your portfolio regularly with your financial planner.
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RBC Financial Planning is a business name used by Royal Mutual Funds Inc. (RMFI). Financial planning services and investment advice are provided by RMFI. RMFI, RBC Global Asset Management Inc., Royal Bank of Canada, Royal Trust Corporation of Canada and The Royal Trust Company are separate corporate entities which are affiliated. RMFI is licensed as a financial services firm in the province of Quebec.