I know there is a lot of noise in the markets right now.
Tariffs, geopolitical tensions, anxiety-inducing headlines: a reminder of what market history teaches us about diversification.
Between tariffs and geopolitical tensions, there is a lot going on in the news. But in times like these, I want to remind you of a simple but fundamental principle: diversification.
It is during these periods of uncertainty that the temptation to “get out of the market” or to sell in a panic is at its greatest.
But the history of financial markets teaches us that riding out storms by staying invested and maintaining a diversified strategy is very often the best decision.
Let’s take a moment to look at this chart:
Every crisis you see in this image — the 1987 stock market crash, the Asian crisis, the tech bubble, the 2008 financial crisis, the COVID-19 pandemic and the war in Ukraine — shook the markets.
Yet despite these many landmark events, the market has always ended up rebounding and growing over the long term.
Here are a few essential reminders about diversification:
- Diversification reduces risk Spreading your investments across several asset classes (stocks, bonds, real estate, etc.) and different geographic regions helps soften losses when one market or sector is struggling.
- You do not need to “predict everything” No one has a crystal ball. The goal is not to anticipate every correction, but to build a portfolio that can withstand the unexpected.
- More stable returns over the long term A diversified portfolio exposes you to different sources of returns and helps you avoid the market roller coaster.
- Avoiding panic Emotions are often the worst investment advisers. Selling after a sharp decline can limit your ability to benefit from the rebounds that often follow corrections.
Take the example of this table comparing the S&P 500 with a diversified portfolio. We can see that in periods of high volatility (such as 2000-2002 or 2008), the diversified portfolio suffers smaller losses than the U.S. market. And over the long term, it even generates a higher overall return.
And if uncertainty remains today, this is precisely the time to make sure your portfolio is diversified and aligned with your long-term goals.
If you have any questions or would like a review of your portfolio to make sure it is well positioned to face today’s challenges, do not hesitate to write to me. I am here to support you.
Have a great week!
The noise always ends up passing
I see it in every turbulent stretch: headlines pile up, contradict each other, then move on to something else. What felt urgent a few months ago is often forgotten today. Your financial plan, on the other hand, is built to last far longer than a news cycle.
I cannot tell you when the volatility will settle down — no one honestly can. What I can tell you is that your strategy was not designed on the assumption that everything would always go smoothly. Turbulence is part of the planned journey.
What I am watching for you
When markets move, my job is not to guess the next headline, but to make sure the essentials remain in place:
- Your asset allocation still matches your investor profile and your investment horizon.
- Your short-term cash needs are covered, so you never have to sell at the wrong time.
- Rebalancing and contribution opportunities (RRSP, TFSA) are being used wisely, based on your situation.
If any of these elements needs adjusting, we will do it together — calmly, and for the right reasons.
When is the right time to call me?
The answer is simple: as soon as doubt sets in. A worry that is named and talked through always weighs less than one you keep turning over in front of the headlines. Sometimes a quick call is all it takes to confirm that you are exactly where you should be.
And if your situation has changed — a new job, a real estate project, retirement on the horizon —, that is one more reason to talk: it is your life, far more than the markets, that should drive the adjustments to your plan. I remain available, as always.
