It turns out advisors might not have to talk clients off the ledge after a recent CIBC survey found the majority of Canadians investing for retirement will stay the course with their portfolio mix despite recent market volatility.
"It's encouraging to see that so many Canadians understand it's important to take the long view and construct portfolios that can withstand volatility in the markets," says David Scandiffio, President and Chief Executive Officer, CIBC Asset Management.
"While there is a fear factor for some investors in volatile markets, those who know how to put a volatile month or a challenging year into perspective are more likely to be comfortable with their investment strategy, and investment returns, over the longer-term."
The survey found:
- 58 per cent of investors say they won't stray from their plan because of one bad year and will stick to their long-term investment strategy in 2016
- 18 per cent will invest more defensively to protect their original investments
- 5 per cent say they will invest more aggressively to get higher returns
- 56 per cent did not achieve the returns they expected over the last year because of declines in equity markets.
There’s also the potential for advisors to invest more as a recent report
from CIBC Economics found that Canadians are holding onto $75 billion in excess cash because of market volatility. The report notes that historically Canadians have waited too long to get back into the market, costing them billions in lost investment returns.