April 10, 2024

Keeping Your Investing FOMO and FUD in Check

In his Q1 2024 update, Rana notes that the financial markets have kicked off 2024 on a strong note, with the S&P 500 climbing approximately 13% (CDN) in the first quarter, marking the most robust start since 2019.  

FOMO and FUD 

This surge brings us to his main topic of discussion: the psychological phenomena’s of FOMO (Fear of Missing Out) and FUD (Fear, Uncertainty, and Doubt). Rana is concerned that investors witnessing short-term market gains may feel the urge to aggressively adjust their portfolios or, conversely, cling to ultra-safe investments due to the volatility experienced since COVID-19, potentially stalling the growth needed to meet financial objectives. 

“...emotional reactions to market fluctuations—whether chasing returns or shunning risk—are not sound investment strategies.” 

As Rana says, emotional reactions to market fluctuations—whether chasing returns or shunning risk—are not sound investment strategies. A well-considered long-term financial plan takes a holistic view of the markets, considering long-term performance, personal time horizons, and risk tolerance. The strategy is the actionable component of this plan, and deviations from it may increase the risk of not meeting financial goals. That’s why consulting an Advisor before making changes is crucial for informed decision-making. 

“...the advent of practical AI applications promises to spur a new cycle of technological innovation, enhancing productivity worldwide.” 

Outlook 

For Rana, looking ahead to the rest of 2024 presents a mix of concerns and optimism. Worries include interest rates, inflation, ongoing conflicts in Ukraine and the Middle East, China’s economic state, and a potentially divisive U.S. election. On the brighter side, many companies are reporting strong earnings, supply chain issues are being resolved, and the advent of practical AI applications promises to spur a new cycle of technological innovation, enhancing productivity worldwide. History has shown that, in the face of such challenges and opportunities, progress is possible and likely assured.


Rana concludes that when navigating 2024’s financial landscape, it will be important to adhere to your established financial plan. The uncertainties ahead, both positive and negative, underscore the importance of sticking to the plan you committed to with the help of your Advisor. 


Disclaimers:

The views expressed in this commentary are those of Canada Life Investment Management as at the date of publication and are subject to change without notice. This commentary is presented only as a general source of information and is not intended as a solicitation to buy or sell specific investments, nor is it intended to provide tax or legal advice. Prospective investors should review the offering documents relating to any investment carefully before making an investment decision and should ask their advisor for advice based on their specific circumstances. The content of this material (including facts, views, opinions, recommendations, descriptions of or references to, products or securities) is not to be used or construed as investment advice, as an offer to sell or the solicitation of an offer to buy, or an endorsement, recommendation or sponsorship of any entity or security cited. Although we endeavour to ensure its accuracy and completeness, we assume no responsibility for any reliance upon it. 


This material may contain forward-looking information that reflects our or third-party current expectations or forecasts of future events. Forward-looking information is inherently subject to, among other things, risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed herein. These risks, uncertainties and assumptions include, without limitation, general economic, political and market factors, interest and foreign exchange rates, the volatility of equity and capital markets, business competition, technological change, changes in government regulations, changes in tax laws, unexpected judicial or regulatory proceedings and catastrophic events. Please consider these and other factors carefully and not place undue reliance on forward-looking information. The forward-looking information contained herein is current only as ofApril 10, 2024. There should be no expectation that such information will in all circumstances be updated, supplemented or revised whether as a result of new information, changing circumstances, future events or otherwise.  Investment Planning Counsel Inc. is a fully integrated wealth management company. Counsel Portfolios are a family of funds managed by Canada Life Investment Management Ltd., a subsidiary of the Canada Life Assurance Company. Trademarks owned by Investment Planning Counsel Inc. and licensed to its subsidiary corporations. Mutual funds available through IPC Investment Corporation and IPC Securities Corporation.


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