Investing with discipline: staying the course through volatility

Hello,

In today’s environment, it is entirely normal to feel uncertain about the financial markets. Headlines come one after another, volatility is very much present, and emotions can quickly take over.

Yet the history of the markets reminds us of one essential thing: discipline and patience remain the long-term investor’s best allies.

Here are a few key reminders to keep a cool head about your investments.

Discipline and patience remain the long-term investor’s best allies.

Perspective Pérennité

The markets have been through far worse… and grew anyway

Between December 31, 1981 and December 31, 2025, the markets had to contend with many major events:

• the recession of the early 1980s,
• the 1987 stock market crash,
• the Asian crisis and the collapse of the rouble in 1998,
• the September 11, 2001 attacks,
• the 2008 global financial crisis,
• the European sovereign debt crisis,
• the U.S.–China trade war,
• the COVID-19 pandemic.

All of these events generated volatility—sometimes extreme—but the stock markets kept growing over the long term.

Over this 44-year period:

• Average inflation: 2.7% per year
• U.S. equities: 12.2% per year
• Canadian equities: 9.6% per year
• U.S. small-cap equities: 11.9% per year

Key message: the noise fades with time, but the growth remains.

One year does not make the rule

Over the last 10 years, U.S. equities were the best-performing asset class 6 years out of 10. Does that make it a certainty year after year? Absolutely not.

The year 2025 is an excellent example: Canadian equities were the best-performing asset class.

This brings us back to a fundamental investing principle:

Yesterday’s return is no promise for tomorrow.

Buy low and sell high… in practice

Every investor agrees with this principle. But in reality, when certain asset classes underperform for several years, they are often the hardest to hold.

So the question to ask becomes:

Is it wise to pay particular attention to asset classes that have recently underperformed, rather than chasing those that have just done well?

It is precisely in these moments that discipline and diversification play a key role.

Time is money (literally)

An investor who starts saving earlier:

• puts their money to work for longer,
• benefits more from compounding,
• needs to contribute less to reach a similar goal.

Starting early is not a question of amount, but of time.

Don’t miss the best days

A striking example from the Canadian market:

• $10,000 invested from 1986 to 2024, without missing a single day, would have reached about $317,576.
• By missing only the 10 best days, the value drops to $148,629.

Trying to guess when to get out of or into the market can be extremely costly.

Staying invested often matters more than “good timing.”

Diversification: less risk, more stability

A diversified portfolio may generate a slightly lower return than a 100% equity portfolio over certain periods, but it offers:

• reduced volatility,
• better protection during bear markets,
• a steadier path toward your goals.

Diversification does not eliminate risk, it makes it more manageable.

The cycle of success… and of emotions

Markets move in cycles. So do emotions:

• enthusiasm after a rise,
• doubt and fear during declines,
• relief during recoveries.

History shows that after a decline, there has always been a rebound. Periods of uncertainty are often those where opportunities arise—provided you have the necessary patience and discipline.

Investing is not about avoiding all volatility, but about staying consistent with a well-defined strategy, aligned with your goals, your time horizon and your risk tolerance.

If you have questions or doubts, or if you would like to review your strategy, don’t hesitate to reach out. A clear plan often turns uncertainty into opportunity.

Looking forward to talking,

Jean-Philippe Giroux

		Stock return, last month	Average stock return, last 3 years
BMO Global Gold	Code: ZGD	9.46%	59.69%
BMO MSCI EAFE (global markets)	Code: ZDM	4.59%	16.24%
BMO Dow Jones (U.S. equities)	Code: ZDJ	4.81%	13.17%
BMO S&P/TSX Composite (Canadian equities)	Code: ZCN	4.44%	21.88%
iShares S&P/TSX Capped REIT (real estate)	Code: XRE	5.99%	4.24%
BMO S&P 500 (U.S. equities)	Code: ZSP	6.12%	21.95%
BMO NASDAQ 100 (U.S. equities)	Code: ZNQ	7.39%	28.07%
BMO Aggregate Bond (bonds)	Code: ZAG	0.35%	3.94%
Purpose High Interest Savings	Code: PSA	0.20%	3.86%

It’s all a matter of perspective…

Amount invested	5% decline	8% decline
$5,000,000	$250,000	$400,000
$2,500,000	$125,000	$200,000
$1,000,000	$50,000	$80,000
$750,000	$37,500	$60,000
$500,000	$25,000	$40,000
$250,000	$12,500	$20,000
$100,000	$5,000	$8,000
$50,000	$2,500	$4,000

The strength of a team

Since 2014, the Pérennité Gestion de Patrimoine team has supported its clients with rigour and commitment in reaching their financial goals. Drawing on our expertise in financial services, we do everything we can to offer tailored, lasting and thoughtful solutions. Excellence guides each of our actions, but above all it is passion that drives our work every day.

Questions?

Feel free to reach out to a member of our team to discuss the positioning of your portfolio.

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