the broken typewriter

By Brad Brain

There is one thing that I think almost everyone will agree on. It surely does seem like the world is falling apart right now.

It’s an interesting phenomenon. It could be unprecedented, for all I know. It seems like it doesn’t matter who you are, you probably think things are bad.

We’ve got the Canadian federal election going on, and if you are a conservative then you probably think that Carney is Trudeau 2.0, only worse. But if you are a liberal you probably think Poilievre will destroy the fabric of what it means to be Canadian. And everyone thinks Trump is a goof. Unless you are one of the 11 percent or so that think that joining the USA would be better than what we have now.

Basically, everyone thinks things are terrible. And most are worried that things will only get worse.

Given all that, there is going to be a lot of people worried about their future. Specifically, they are going to be worried about their money.

Even in normal times, the number one fear that people have as they enter retirement is running out of money. And these are not normal times.

Fear does have its uses. The fight or flight response is what kept us alive 10,000 years ago when there was a rustle in the bushes on a dark night.

But fear is a lousy mindset for making rational decisions about money. So, this is the most important thing that I can tell you today…

Believe it or not, this is almost certainly not the end of world. In fact, purely from an investing point of view, and despite the relentless barrage of clickbait that you are exposed to every single day, its probably not as bad as you may fear.

If I was to ask you how much you think the markets are down right now, what would you guess? Twenty percent? Thirty percent? More?

Believe it or not, as of April 1, 2025, the Toronto Stock Exchange is actually slightly positive year to date.

Yep, that’s right. Despite all that stuff you see every single day about how bad the other guy is and how doom is imminent, the benchmark index for Canada is actually up for the year.

The problem with allowing fear to be your tour guide is that you end up buying into a narrative that may or may not happen.

I recall back a particular incident that happened during the Great Recession of 2008. After a significant market decline, a client was convinced that we were in for a double dip. He was certain that, even though it was a lousy time to sell his investments, that was necessary to preserve what remained. His strategy was that he would just wait for the markets to go down even further, then he would buy back in. After all, everyone knew how bad it was out there, so of course the markets were in for a tough time, right? Against my advice, he sold everything he owned.

The only problem is, his fears never materialized. In fact, it was the opposite. Following the big losses of 2008, the markets made historic gains. Except for this one client who let his fear take over and sold out at the bottom. Although the markets recovered, he never did. He never did get back in. He just kept sitting in cash while the markets went higher and higher, completely missing his chance to recoup his losses.

When it comes to making good investment decisions, there are a few keys to success. One is to try to avoid making emotional decisions about money, but that can be easy to say and very, very hard to do.

I think its better not to put yourself in a situation where you are forced to make emotional decisions in the first place. The easiest way to do that is to make sure that your investments are aligned with your financial objectives.

If you have a short time frame, then buy stable investments. Now you won’t be exposed to the same volatility that accompanies growth investments. In the short term, emphasize predictability and liquidity over gains.

If you have a long-time frame, then buy high quality investments and take a long-term view. Now market volatility is less of an issue – unless you are looking at it as a buying opportunity – because you have the time to wait for the inevitable recovery.

Don’t let your emotions corrode your framework for making decisions.

This is the most important thing that I can tell you today.

Brad Brain. CFP, R.F.P., CIM, TEP is a Certified Financial Planner in Fort St John, BC. This material is prepared for general circulation and may not reflect your individual financial circumstances. Brad can be reached at www.bradbrainfinancial.com.