A special note on the world markets for interested investors:
The first three months of 2009 were eventful ones. As of March 9, world markets had dropped between 15 and 25% from the beginning of the year before showing a significant recovery in the last three weeks of the quarter. All things considered, the first quarter of 2009 unfolded as follows: the Canadian S&P/TSX composite index performed at -2.97%, whereas the US S&P 500 reported a performance of -11.67%.
From all evidence, the financial markets will remain volatile. Mere days can make a difference in the total performance of your portfolio in years to come. Although we would like to avoid bearish days, above all we do not want to miss bullish days such as those of the few weeks. Many studies show that investors who attempt to predict market ups and downs—market timing—realize lower profits than do those who follow their investment strategy.
Certainly, each investor will have a different strategy, based on a number of factors. One of these is the investment horizon, in other words, the time remaining before you need to withdraw the amount invested. At retirement, it is possible that you will not withdraw a portion of your money for another 10 years, in accordance with your financial plan. Over a longer period, the risk of a negative performance decreases to the point of becoming very low over a 10-year period.
*Courtesy of Assumption Life
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