Over the past few months, we’ve had more conversations with clients who are understandably nervous about the markets. Between wars, inflation, interest rates, and Trump, there is no shortage of things to worry about. Yet despite the noise, markets have held up remarkably well. Part of the problem may be that markets performed so strongly earlier in the year that we’ve become a little spoiled. Apparently, when stocks don’t go up every week, something must be wrong.

One lesson we’ve learned over many years of investing is that trying to time the market rarely works out as planned. Selling when things look uncertain is relatively easy. The difficult part is knowing when to get back in. Markets have an annoying habit of recovering before the headlines improve, usually just after everyone has convinced themselves it was a good idea to sell.

There is also some interesting history working in investors’ favour as we approach year-end. November and December have historically been two of the strongest months for stocks. Even more interesting, the S&P 500 has risen in the 12 months following every U.S. mid-term election since 1950, averaging gains of roughly 15%. With midterm elections approaching, history offers some encouragement, although certainly no guarantees.

Of course, we wouldn’t suggest investing simply because the calendar says November or because Americans are heading to the polls. If investing were that easy, we’d all have retired years ago. What matters more is that corporate earnings remain healthy, the economy continues to grow, and our longer-term investment outlook remains constructive.

Markets don’t move higher in a straight line, and periods of consolidation are a normal part of investing. We continue to watch inflation, interest rates, and corporate earnings, but we see little reason to abandon a long-term strategy simply because markets have taken a breather.

Sometimes the biggest risk for investors isn’t being in the market when it falls, it’s being out of the market when it rises.

I have also included a piece from our CIBC Economics Team entitled “The leaky loonie” and below, an invitation to next week’s estate strategies webcast featuring Jamie Golombek and Kate Lazier.

As always, if you have any questions, please feel free to give us a call at any time.

Have a great weekend.

Milan