We’ve all been inundated with email lately from every possible source about the impacts of the COVID-19 virus – and we apologize that you’re getting one more. But we take great care with the clients we work with, and we felt it was important to reach out to let you know how we’re addressing the situation in our own organization too.
Like many others, we are doing our best to balance our ability to take care of our clients while protecting the health and safety of our team. Fortunately, we’ve been involved in a project over the past two years to put many of the systems in place that allow this to happen. Among other things, our team has secure remote access to the tools, services, and information that we use to help clients every day. We have every ability to help answer questions, help you with your investing and insurance questions and work through your own individual needs. Our business continuity plan is fully in force.
And as always, there is a whole infrastructure behind us continuing to look after the daily management of your investments – the thousands of people with our investment fund managers – watching over your savings.
What has changed?
1. As an increasing number of our team may be working remotely, we may have minimal staff in the office at any given time, or they may be in on rotation. This means that wherever possible, we’re trying to work with clients over the phone, email, or video conferencing to assist with your day to day questions and transactions. We know that some people have more complex needs, and so we are still making appointments in those situations to sit down face-to-face while following the best practices available to us in those situations.
2. Some educational sessions that we had been scheduled for (pre-retirement sessions, financial wellness or staff education sessions) have been temporarily put on hold. In some cases, we’re researching web-based ways to deliver this content.
3. If we’re speaking to you on the phone, it’s entirely possible that you may hear the voices of our “little bosses”, or some barking or meowing. A lot of us are either parents or furbaby parents and we haven’t all figured out how to deal with this school closure thing yet.
The important thing to know is that we are still here to support you – and we truly appreciate your patience as we work through some of the logistics of that.
Hey, but what about my investments?
Mixed in with the health concerns and facility closures has been a lot of news about investments and market changes. We are monitoring the news very closely. We always want to make sure that we’re doing our utmost to look after our people. That said, it’s important to keep this in mind:
These things happen. Markets go up, and markets go down. And looking at your investments on one particular day when all the news is bad can freak you out, affect your sleep, and increase your anxiety. So please don’t do that.
Your investments are there for the long term. For many people, retirement is a long way away. If you have a pension, you may not even touch your RRSPs for years, even after retirement. It could be decades from now before you even need to access it.
None of us can predict the future, but there are things we know about the past. Markets regularly see these drops – they’re sharp, and they make a lot of news headlines. But they’re also short-lived. Volatility around an incident like an epidemic can be around for weeks and months. Your retirement income will be there for years and decades.
Markets have behaved in a consistent pattern – you can see the past drops triggered by historical events, whether it’s the events of 9/11 or the subprime mortgage crisis. This shows the market returns of the last 50 years:
What do we take away from that?
Markets spend way more time going up than they do going down. As long as you don’t panic – as long as you don’t try to take your funds out at the bottom of the market, or move them when things are discounted – historically, they’ve rebounded. And stayed up for a much longer period of time than they’ve been down.
There’s a saying in the investment industry: “Don’t try to catch a falling knife.” Your investments, if they’re properly diversified for long-term investment (like all of our default options) are designed for the long term – they’re built knowing that these short-term setbacks will occur. With stock prices as high as they’ve been for a long time, many investment fund managers at the companies we work with have been sitting on pools of cash, waiting for the right opportunity to purchase investments at a discount. When markets drop like this, stocks go “on sale” – it can be a great buying opportunity for them.
Please let us know if you have any questions! In the meantime, stay safe, support those who need it, and wash your hands like you just chopped jalapenos and you need to change a contact lens!
All the best,
The team at Capital Estate Planning Corporation
Current quotes from some leading investment thinkers:
Josh Brown – The Reformed Broker:
“Why don’t we just sell everything and wait this out? Get back in when the dust settles? This is the question every financial advisor is getting this week, from at least one or two clients. They’re asking out of genuine curiosity, not just panic or fear. And it’s a great question. The great answer is that you won’t know when the dust settles. There’s no airplane writing the “all clear” in the sky above your neighborhood. And when the dust settles, do you think stocks will be at their lows? Or will they have already rallied furiously, in anticipation of this?"
"Let me give you an example. Today is March 9th. Precisely eleven years ago today, in 2009, the stock market stopped going down. There was no reason. The dust had settled, without fanfare or any sort of official announcement. If you had polled people that day, or week or even month, most would not have agreed that we had seen the worst. The economic headlines were not improving. But there it was. And by June 1st, less than 3 months later, the stock market had climbed 41% from that March low."
"And even with that having happened, the majority of participants still weren’t clear that the dust had fully settled. That we had, in fact, seen the worst. There were still people calling us 3, 5 and 7 years later who had gone to cash and still hadn’t gotten back into stocks. They missed a new record-high a few years later and hundreds of percentage points in compounding on their assets."
Nick Murray (Investment Author):
“Riding out this historic decline is how investors will earn the premium returns of equities when the firestorm of terror burns itself out and the permanent advance resumes.”
Plus one bonus quote!
Warren Buffett on Volatility:
“This is the one thing I can never understand. To refer to a personal taste of mine, I’m going to be buying hamburgers the rest of my life. When hamburgers go down in price, we sing the ‘Hallelujah Chorus’ in the Buffett household. When hamburgers go up, we weep.”
“For most people, it’s the same way with everything in life they will be buying — except stocks. When stocks go down and you can get more for your money, people don’t like them anymore.”