Effective November 27, 2021, the deferred sales charge and low load sales charge purchase options will no longer be available for purchase on Sun Life Global Investments mutual funds. Switches between funds of the same sales charge purchase option will be permitted.

Portfolio insights

Volatile markets? 4 questions to ask your financial advisor

Worried about market volatility and the state of the economy?  It may be a good time to connect with your advisor. Here are 4 questions to ask.

Inflation, interest rate hikes, falling stock markets. It seems like everyone is talking about them. Veteran investors know that stock markets go up and stock markets go down. Are you worried about the economy? You’re not alone.

What should you do? See it as an opportunity to touch base with your advisor.

Here are four worthy questions to ask.

  1. How is my money invested?
  2. How can I protect my portfolio?
  3. How well are my investments performing?
  4. Is there a better option?

1. How is my money invested?

Every investor has their own level of risk tolerance. It may turn out that your asset mix is more than appropriate for you.

Ask your advisor how much of your money is invested in: 

  • equities; 
  • fixed income; 
  • cash.

“Did the investment plan that you set up with your advisor make sense one year ago? Then chances are, it makes sense today,” says Dan Richards, Globe and Mail contributor. 

Still, you’ll want to ensure that you aren’t putting too many eggs in one basket, says Alison Griffiths. She’s a retired financial columnist and author of a self-titled blog about money management. Sometimes 60% in equities has a way of becoming 65%, for instance. “As an investor, the best defence is to spread eggs out over a number of investment baskets,” she says.

Retirees and market volatility

Retired people need to ensure they have adequate cash holdings. They are, in many cases, living off their investments. “The rule of thumb is three years of liquid investments. That way, you don’t have to worry about liquidating things at the bottom of the market,” says Richards.

2. How can I protect my portfolio?

Were you okay with mainly equities but now have a change of heart? It might be time to revisit your investment plan, Richards says. “There may be things that you thought you could live with before. It may no longer be the case now that you’ve experienced volatility.”

Alison Griffiths finds that most people have too much invested in equities. “While fixed income and cash provide the lowest returns, they also provide the balance in your portfolio.”

3. How well are my investments performing?

Griffiths suggests you inquire how your mutual fund is performing relative to its peers and a benchmark index.  “If you see yours consistently at the bottom, you know you have a problem,” she says. “People really need to get this information. Why would you keep putting money into a bad investment?”

4. Is there a better option?

Maybe you’ve found a dog among the rest of your investments. Have your advisor walk you through all the possibilities. Advisors licensed to sell securities and/or insurance can offer more product solutions beyond mutual funds.

Some examples? Low-cost exchange-traded funds and guaranteed minimum withdrawal benefit products.

More concerned with protecting your principal? Ask your advisor about products like segregated funds and annuities.

Reach out to your advisor to have a proactive discussion about your investments. It could enhance your relationship. More importantly, it might also give you more peace of mind.

Important information

This content is provided for information and illustrative purposes only and is not intended to provide specific financial, tax, insurance, investment, legal or accounting advice and should not be relied upon in that regard and does not constitute a specific offer to buy and/or sell securities.

Information contained in this document has been compiled from sources believed to be reliable, but no representation or warranty, express or implied, is made with respect to its timeliness or accuracy.