The hallmark of any good relationship is communication. With this in mind, we’ve dedicated significant time in recent weeks to client concerns about the COVID-19 pandemic and how it might affect their finances. We’ve also, as you’ve probably noticed, sent out a number of emails with resources that you might find useful.
For this month’s blog post, we thought it might be helpful to pull together some of the most common themes we’ve been dealing with in calls and emails with clients. These might be topics you’ve also been thinking about recently.
Your Portfolio is Not Down as Much as the Stock Market
March in particular was undoubtedly scary for investors: stock markets plunged amid fears of the pandemic’s impact on the economy. That said, we are happy to tell you that your portfolio has not declined by the same rate as the S&P 500 south of the border or the TSX here at home. Reason being, you are broadly diversified, owning a wide basket of global equities selected by our managers, as well as bonds that have helped to stabilize your portfolio. In addition, most clients have an allocation to our tactical fund, which has taken advantage of short-term opportunities in the market.
Reducing Cash Flow Might be Something to Consider
We’ve fielded a number of questions around cash flow. Assuming your short-term needs are covered, it can be a good idea to limit how much cash you’re taking out each month given that markets have fallen substantially. We would suggest waiting until markets rebound so you can get better value for what you own. And in the event that you do have liquidity needs, we can work with you to find out the best possible way to satisfy them. One possible strategy is to sell something that has fallen significantly in order to take advantage of tax-loss selling.
There are Many Ways to be Proactive
We can’t change the markets (if only). But there are a number of things we can help you with in these decidedly unusual times:
- Review and update your financial plan to give you an accurate view of your long-term financial situation
- Review your monthly spending budget
- Revisit your long-term investment strategy and risk tolerance with us to provide you with specific information on your personal circumstances
- Revisit your current guaranteed income and cash flow situation, and ensure you have ample liquidity to meet short-term needs
- Review government programs offered to provide assistance to individuals and businesses
Feel Free to Reach Out
If you have a question or concern that isn’t addressed here, please do reach out to us. In the meantime, we encourage all of our clients to remain focused on their long-term investment strategy. We are confident it will meet the test of time.
