Around the globe, people are experiencing a range of emotions, with fear over their own health and that of their loved ones at the top of the list. These are concerning times and these emotions are normal. I want to extend our support to you and your family and hope that you are doing well as this crisis continues to unfold.
What we’re doing
Right now, it is understandable that people are experiencing fear about their savings. At Sun Life Global Investments, it is our job to focus on long-term strategy. I want to assure you that we are actively managing risk and monitoring opportunities in our portfolios. Our investment teams not only have the expertise, they personally care about managing the current situation for you.
Each market downturn has its own set of circumstances. Today, countries are doing things in the interest of public health that, by their nature, limit certain kinds of economic activity – travel, tourism, commuting to and from offices. In addition, there has been an unexpected shock to the oil markets.
We’ve seen a lot of action from governments in a short period. Significantly lower interest rates and stimulus spending show there’s a willingness to use policy to try and limit the impact on our economy. As COVID-19 runs its course in various countries, these types of backstops can lessen the likelihood of recession, or reduce the severity if there is one.
The importance of investor behaviour
Investor behaviour is so important at this time. During downturns, there will be regret. There will be an instinct to cut losses. Fear is a powerful emotion that feeds on itself. However, what we have to rely on in these times is history. Long-term studies show that, when investors attempt these timing decisions, their returns generally suffer. They have to be right twice: on the sell and on the buy. It’s hard to get both right.
Based on history, we also know that following a market decline, we see a periods of recovery. It could happen suddenly, or it could take a few years. But we know that investors that remain calm and invested, benefit from the eventual recovery.
The importance of advice
This may sound clichéd during a tough market, but it’s still true. Advice is really important. It’s hard to be an investor and watch your portfolio when there are market downturns. But advisors are trained to work in both positive and negative markets. They offer valuable advice in helping clients stay diversified, and focused on goals, timelines and risk tolerance. It’s important for clients to stay in touch. Similarly, as portfolio managers, we are trained to manage risk and seek opportunities in good times and bad. In partnership, we are committed to helping you get through this. We’re here for you.
This commentary contains information in summary form for your convenience, published by Sun Life Global Investments (Canada) Inc. Although this commentary has been prepared from sources believed to be reliable, Sun Life Global Investments (Canada) Inc. cannot guarantee its accuracy or completeness and is intended to provide you with general information and should not be construed as providing specific individual financial, investment, tax, or legal advice. The views expressed are those of the author and not necessarily the opinions of Sun Life Global Investments (Canada) Inc. Please note, any future or forward looking statements contained in this commentary are speculative in nature and cannot be relied upon. There is no guarantee that these events will occur or in the manner speculated. Please speak with your professional advisors before acting on any information contained in this commentary.
©Sun Life Global Investments (Canada) Inc., 2020. Sun Life Global Investments (Canada) Inc. is a member of the Sun Life Financial group of companies.