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Milan Cacic

May 27, 2022

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STICK WITH THE PLAN

During volatile times like these, it is easy to focus on the short term and forget about your long-term investment plan. Emotions run high and sometimes we get a pit in the bottom of our stomach. Typically, this is when bad decisions are made.

 

This would be a good time to remind ourselves that since the year 1990, the S&P 500 has returned an average annualized return of 10% per year. This has been achieved despite two bear markets which experienced a 40% drop from all-time highs back then.

 

Source: The Biggest Mistake an Investor Can Make, Charlie Bilello, Compound Capital Advisors LLC, May 2022

 

As we discussed on our conference call a few days ago, the US equity market has had eight corrections in the past 10 years. All of which experienced at least a 10% drop from then all-time highs. Two of those corrections were more than 20%, and one was more than 35%. Unfortunately we are currently experiencing our ninth correction! The one consistency of the market is that while asset prices will move up and down, over the long term, the trend is up and to the right (as seen above).

 

During times like these, a well-defined investment plan along with a consistent investment process is what matters. Sometimes our biggest issue with investing can be ourselves. Stick with the plan!

 

I have also included a piece from our CIBC Economics team entitled "Inflation: a deeper dive".

 

As always, feel free to give us a call at any time.

 

Have a great weekend.

 

Milan

 

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CIBC Private Wealth” consists of services provided by CIBC and certain of its subsidiaries through CIBC Private Banking; CIBC Private Investment Counsel, a division of CIBC Asset Management Inc. (“CAM”); CIBC Trust Corporation; and CIBC Wood Gundy, a division of CIBC World Markets Inc. (“WMI”). CIBC Private Banking provides solutions from CIBC Investor Services Inc. (“ISI”), CAM and credit products. CIBC Private Wealth services are available to qualified individuals. Insurance services are only available through CIBC Wood Gundy Financial Services Inc. In Quebec, insurance services are only available through CIBC Wood Gundy Financial Services (Quebec) Inc.


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