March 20th 2020 FVI Update
Yesterday I sat down and wrote a wordy update on how weird this whole experience has been so far, and the more I thought about it, the more I realized that it is likely you all get it; this is weird and it isn’t going away any time soon. We also know this won’t last forever. We also know what this is, which is a luxury as we head towards a very likely global recession.
So I scrapped that and wanted to talk briefly about our plan going forward. Not just our plan for the virus, or the aftermath, or the eventual recovery and expansion but for the next decade and beyond and how we can actually best prepare for whatever bizarre thing happens in the future.
In the short term we advise to stay the course. We have great fund management, and the last two years of additions and changes has, so far, given us a solid cushion between your money and the indexes around the globe.
While we have dropped in value, we have dropped by about half of what the global markets have. We did this without giving up any of the potential for positive returns and with less volatility. More return, less risk… exactly what you’ve been asking for.
In the “smedium” term, say 1-3 years, we believe the best option for investors will be to stick to your guns and do everything you can to invest at regular intervals. Dollar Cost Averaging (DCA) will be the safest and best way to accomplish solid growth from the havoc the markets are wreaking.
Avoid the Advice Chasm, stick to the program.
It has often been said that “more money has been lost trying to time the markets than the markets have ever lost on their own.” And you know what? It isn’t even close. So don’t try to time anything, just keep investing. Just keep investing. Just keep investing… (just keep swimming, just keep swimming, just keep swimming. I just watched Saving Dory. 🤷🏻♂️)
Dollar-cost averaging helps us avoid trying to time the markets, so if you have the ability to and the time frame to do so, please ensure you are investing at monthly intervals.
IA has one of the best high-interest savings vehicles on the market today that we can automatically draw from to accomplish this in an efficient manner. 1.05%/A as of today (March 19, 2020). Systematically we can draw from this savings and into the markets.
Longer-term, from today to 2030 and beyond: keep diversifying and stay ahead of trends.
So, pretty much don’t change a thing?
Not quite. We will always evolve and work to find new concepts and appropriate ways to respectfully add risk to the portfolio while being conscious that our entire ethos relies on avoiding typical “low risk” investments. Feeling protected is not the same as being protected.
We do have plans, we are working on interesting things, and we will persevere.
For the immediate term, remember that we are around, and we will be fielding calls at your leisure. The IA website is always live, and always has good information on it and your client login “My Client Space” can help keep you up to date. If you don’t yet have access to My Client Space, please email Kerry and she can help you get set up.
Lastly, but perhaps most importantly, please watch these videos (Part 1 and Part 2) for some advice and information straight from one of Canada’s leading economists and IAG’s SR. VP. Clement Gignac, and his team. This is a nice back and forth between some incredible minds. It is worth the time to watch it.
Both dad and I hope you are all finding time to reflect and perhaps expand your knowledge of new topics and ideas during this experience, as we hope you all stay healthy.
Please don’t be afraid to reach out, even if it is just to hear a different voice.
We are here.
Thanks for reading,
Darris Cameron
President & COO
Financial Value Inc.