Edmonton Real Estate Blog

We live in a world where information is available every minute of every day. Shown below is how often the terms economy or recession came up in media reports over the past five years. Note the intensity of coverage during the financial crisis of 2009. The height of headline frenzy came in March, 2009 in retrospect the bottom of the market, resulting in many investors exiting at one of the worst possible times to do so. The markets have subsequently risen by more than 50%. The bottom line? Short-term sound bites and news clips can cause us to lose sight of what’s important, and to take impulsive action when we need to remain calm.

Feel free to contact me or visit my website for more information.
Douglas J. Bodtcher  
Investors Group Financial Services Inc.
780-448-1988 ext. 284
Douglas.Bodtcher@investorsgroup.com

Over the past 40 years, the S&P/TSX Composite index has experienced 14 negative calendar return years.

As shown in the chart, in each instance, with only two exceptions, the following year saw the markets in positive territory. Further, these gains were solidified with 5 year double digit returns.

These results demonstrate the resilience of the markets, and that investors have typically been best-served by maintaining a long-term focus despite short-term market volatility.

Feel free to contact me or visit my website for more information.
Douglas J. Bodtcher  
Investors Group Financial Services Inc.
780-448-1988 ext. 284
Douglas.Bodtcher@investorsgroup.com

Using a portfolio approach to properly diversify your assets can reduce the negative effects that any individual security or asset class may have on the performance of your portfolio. Financial markets don’t always move in the same direction. When stocks are rising, for example, bonds may decline in value. Similarly, different types of equities or even investment styles are more successful in some market conditions than others. By carefully diversifying your portfolio, we can reduce your risk and enhance your chances of successfully attaining your long-term goals.

Feel free to contact me or visit my website for more information.
Douglas J. Bodtcher  
Investors Group Financial Services Inc.
780-448-1988 ext. 284
Douglas.Bodtcher@investorsgroup.com

One of the most visible indicators of investor sentiment is daily market volatility. When indexes exhibit extreme moves as measured by +/- 1% price changes on any given day, it is likely that emotions (fear or greed) are driving investment decisions. Why? Because the fundamental value of a business does not change by 1, 3, or 5% in any given day, in this case the market is revaluing the enterprise not on fundamental value, but on emotion. As seen below, volatility by this measure increased dramatically at the end of 2008, as investor concerns over the future resulted in extreme price fluctuations. In contrast, volatility declined throughout 2009, suggesting a more fundamental approach to pricing assets.

Feel free to contact me or visit my website for more information.
Douglas J. Bodtcher  
Investors Group Financial Services Inc.
780-448-1988 ext. 284
Douglas.Bodtcher@investorsgroup.com

Many Canadians are pleased to receive a tax refund each spring, but what if you had that money to spend each month when you really needed it and were able to contribute more to your annual RRSP contribution at the same time? The concept of Dollar Cost Averaging has been around for many years. Essentially, investors who practice this investment strategy make fixed dollar investments on a regular basis. If used for regular monthly RRSP investments, this strategy can translate into potentially better returns, increased ability to save and a boost in take-home pay.

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Dividend and interest income are two common sources used to satisfy an investor’s cash flow needs. The Investors Dividend Fund (IDF) aims to provide above-average income yield, protect the value of its investments and achieve long-term  capital appreciation. The objective for a GIC is generally to preserve capital while distributing interest income at a fixed rate. Determining which investment alternative is the right fit should be consistent with your comfort level with market
risk and your after-tax income objectives.

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The efficient frontier identifies the combination of assets that are expected to achieve the highest return for a given level of risk – meaning they are most efficient in terms of their risk/return characteristics. Since 1950, investing in fixed income has generally reduced investment risk. However, the stability of this asset class also lowers the long-term growth potential. Canadian equities have produced the necessary asset growth to achieve long term investment objectives. Even conservative investors should allocate at least 30% of their portfolio to equities. The expected outcome is enhanced investment returns with similar levels of investment risk over the long term.

Feel free to contact me or visit my website for more information.