Navigating Market Volatility – What Should You Do?
The past few months have been eventful, to say the least. Concerns over trade tensions have caused significant fluctuations in the financial markets, and economic forecasts have become increasingly uncertain. Understandably, many folks are wondering what actions—if any—they should take with their investments and portfolios.
While this period of volatility can feel unsettling, it’s important to approach it with a rational mindset. Market declines, though uncomfortable, are a normal part of investing. Volatile or falling stock prices do not necessarily signal a broken market or impending crisis. Rather, they are expected from time to time and should be accounted for in every sound investment strategy. History consistently shows that markets are resilient over the long term. Even just five years ago, we experienced sharp declines as the world entered a global pandemic—yet we emerged, and markets recovered to reach new highs.
So, what should you do?
While market volatility and negative headlines are hard to ignore, it’s important to avoid making impulsive decisions based on short-term movements. Pathfinder client portfolios have been designed with periods like this in mind. Though it may feel like sitting on your hands, maintaining discipline during turbulent times is not only wise, it is essential. Along with discipline, it is important to maintain a long-term view that aligns with your financial goals.
In short: stay the course.
Our clients’ investment strategies and asset allocations have been built to support them through both favorable and challenging conditions. Reacting emotionally—especially by exiting the market during downturns—is one of the most common ways to undermine long-term returns. Pathfinder portfolios are grounded from sound financial plans and risk profiles.
Periods of uncertainty like this also offer an opportunity to reassess your personal risk tolerance and portfolio alignment. Are you sleeping well at night? If not, your current strategy may be too aggressive. On the other hand, if market swings barely register with you, you may be in a position to take on more risk.
This means that market fluctuations are a natural part of investing. If your goals and time horizon haven’t changed, this may even be a good time to consider putting idle cash to work. Meanwhile, our team remains fully engaged—monitoring portfolios, making prudent adjustments, and seeking opportunities that volatility can present.
As always, we’re just a phone call away if you’d like to discuss your portfolio and financial plan in more detail.
Pathfinder General Line: 604-682-7312
National Instrument 31-103 requires registered firms to disclose information that a reasonable investor would expect to know, including any material conflicts with the firm or its representatives. Doug Johnson and/or Pathfinder Asset Management Limited are an insider of companies periodically mentioned in this report. Please visit www.paml.ca for full disclosures.
Changes in Leverage. We are increasing the asset ceiling to 2.0 times the market value of equity for Pathfinder International Fund and Pathfinder Conviction Fund to be consistent with Pathfinder Partners’ Fund and Pathfinder Resource Fund.
For more information, please follow the links above to review the fund term sheets.
*All returns are time weighted and net of investment management fees. Returns from the Pathfinder Partners’ Fund and Partners’ Real Return Plus Fund are presented based on the masters series of each fund. The Pathfinder Core: Equity Portfolio and The Pathfinder Core: High Income Portfolio are live accounts. These are actual accounts owned by the Pathfinder Chairman (Equity) and client (High Income) which contain no legacy positions, cash flows or other Pathfinder investment mandates or products. Monthly inception dates for each fund and portfolio are as follows: Pathfinder Core: Equity Portfolio (January 2011), Pathfinder Core: High Income Portfolio (October 2012) Partners’ Fund (April 2011), Partners’ Real Return Plus Fund (April, 2013), and Partners’ Core Plus Fund (November 2014).
Pathfinder Asset Management Limited (PAML) and its affiliates may collectively beneficially own in excess of 10% of one or more classes of the issued and outstanding equity securities mentioned in this newsletter. This publication is intended only to convey information. It is not to be construed as an investment guide or as an offer or solicitation of an offer to buy or sell any of the securities mentioned in it. The author has taken all usual and reasonable precautions to determine that the information contained in this publication has been obtained from sources believed to be reliable and that the procedures used to summarize and analyze such information are based on approved practices and principles in the investment industry. However, the market forces underlying investment value are subject to sudden and dramatic changes and data availability varies from one moment to the next. Consequently, neither the author nor PAML can make any warranty as to the accuracy or completeness of information, analysis or views contained in this publication or their usefulness or suitability in any particular circumstance. You should not undertake any investment or portfolio assessment or other transaction on the basis of this publication, but should first consult your portfolio manager, who can assess all relevant particulars of any proposed investment or transaction. PAML and the author accept no liability of any kind whatsoever or any damages or losses incurred by you as a result of reliance upon or use of this publication.