A large part of our commitment to you is providing you with honest, current investment advice. For instance, we’ll be the first to tell you that financial markets are cyclical in nature. In the normal course of events, markets rise and fall in response to economic conditions.
However, while markets can be volatile and unpredictable in the short term, history has shown them to be remarkably predictable over time. The long-term direction of markets is up.
Take this example:
$10,000 invested in January 1987 in the S&P/TSX Total Return Index was subject to periods of significant volatility, and yet was worth $67,167 by December 2009 for those who kept their eyes on the horizon.
(Source: Globefund.com)
It doesn’t pay to “time” the market
Another financial fact we share with all of our clients in the education community is that those most at risk of losing money are investors trying to “time” the market.
Timing the market means attempting to “buy low and sell high” – something that is difficult enough for the experts to accomplish, let alone the average investor. What often happens is exactly the opposite. Investors panic and sell during the downturns, so they miss out on the subsequent advances when the market recovers. These same emotionally-driven investors may wait until after the market has recovered to buy back in – thereby “selling low, buying high” and falling further and further behind in their investment goals.
Our advice: Take the long view
At Educators Financial Group, we advise our investors to make a long-term investment plan, and invest for steady returns over the long haul. That way, when there’s an unavoidable short-term drop in the market, you’ll have the ability to “wait out the storm”, and maintain your investment positions until the market begins to rise again.
Our experience allows us to provide you with tips to not only weather the storm, but possibly even profit from it. For example, by arranging to automatically invest a fixed dollar amount at regular intervals through a preauthorized contribution (PAC), you naturally pick up more investment units at bargain prices on market downturns.
In addition to tips, you can rely on us to provide tried and true advice for long-term investors, such as the following:
- Choose high-quality mutual funds investments managed by seasoned investment professionals – a strategy which enables you to invest in a diversified portfolio.
- Keep your eye on long-term objectives and stay the course with your investments through the ups and downs of market cycles.
- When markets move to lower levels, continue to invest, taking advantage of the lower prices. This way, you’ll end up buying more units when they’re less expensive, and fewer when unit prices rise – otherwise known as dollar cost averaging.
What you should know about our funds
At Educators, we proactively manage our fund managers. We meet with them regularly to monitor progress and ensure their investment strategy is on target, as we hold them accountable to achieve top quartile results. These fund managers are expert professionals in their field who have built a track record of success investing in all market cycles. We know our managers are always monitoring rates and other developments as they relate to our funds. They will make any necessary adjustments to protect your investment.
We value variety
As an Educators Financial Group client, you can choose from our complete family of funds, or from third-party funds designed to suit a range of investment objectives. Whether you prefer a safe haven for your savings, or investments with higher growth potential, or something in between, we’ll find a fund that’s right for you. Keep in mind that while you stand to grow your investments more when the market goes up, you could also be exposed to risk when the market drops.
We’re always here for you.
You can count on your long-term strategy. If your asset mix was recommended by an Educators specialist, and provided there haven’t been any major changes in your personal financial situation, your portfolio should serve you well through future market cycles.
Of course, our planners are always ready to review your financial needs and goals, and help you make any necessary adjustments to your portfolio so you remain comfortable with your acceptable level of risk. If you’d like us to take a look at your current investment portfolio, simply give us a call. We look forward to helping you invest with peace of mind.
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.
