The New Year brings a time of hope for Canadians, and after dealing with the COVID-19 pandemic for almost two years, hope is definitely high on the agenda. In addition to the health and well-being challenges we faced, we have had to deal with economic uncertainty, supply bottlenecks and financial questions, especially for those nearing retirement. We have seen some individuals advance their retirement plans in cases where their comfort levels while continuing in their current employment have diminished, while some have looked at from the perspective of enjoying a better quality of life sooner.
Fortunately, even with the challenges of the past year, portfolios have been given a lift from a general improvement in global stock markets and that may also provider a greater degree of confidence in their ability to meet their retirement goals. Having said that, I know that many of you are still concerned about recent volatility in financial markets, sharply higher inflation, and the prospect of interest rate increases.
To get us through these uncertain times, the best approach is to focus on the long-term. Even when retirement may be only a few years out, there are many more years after that day for your nest egg to work for you, so having a long-term horizon is still appropriate. Everyone’s interpretation as to how long that focus is will be different, of course, and that is why investment strategies are unique to one’s individual risk tolerance, financial ability and knowledge, and need for risk. Some argue that in an environment where inflation is higher than what we have experienced in recent decades, and where the bond market may be vulnerable to rising interest rates, investors need to have more exposure to stocks. For some that might be true, but as we enter a brand-new year with new opportunities and new risks, the phrase “talk to your advisor” has never been more important.
Andrew Pyle, Senior Investment Advisor and Portfolio Manager
CIBC Wood Gundy
Andrew Pyle is an Investment Advisor within CIBC Wood Gundy in Peterborough.
The views of Andrew Pyle do not necessarily reflect those of CIBC World Markets Inc.