Weekend Reading: Stocks Fall to Prices Not Seen Since June Edition

Hopefully by now my financial planning clients and blog readers have been conditioned to ignore short term drops in the market – even big ones like we experienced this past week.

The reason why stocks have such attractive long-term returns is because they ARE risky to own in the short-term. That’s a feature, not a bug.

But it’s understandable that investors get fearful when they see markets fall 2% or more in a day. These big moves to the downside bring out panic-inducing headlines and calls for further pain in the future.

The truth is nobody knows where stocks are heading in the short-term.

This past two-day stretch was the worst two-day stretch for stocks since the last worst two-day stretch for stocks that you don’t remember or care about anymore.

Remember this one – the worst day ever for stocks back in February 2018? Neither do I.

Or, think of it this way: Were you happy with your investment portfolio when the market closed on Friday June 28th?

Because that’s pretty much where global stocks have retreated – back to their June 28th prices, which were all-time highs by the way.

Ignore the Doomers and the negative news headlines, heck – stop checking your portfolio multiple times a day. This too shall pass.

This Week’s Recap:

Last week I shared a report that showed more than 80% of new condo investors in Toronto were bleeding cashflow to the tune of $605 per month. Not good!

From the Twitterverse:

Imagine buying individual stocks? https://t.co/h6Yvmlautx

— Boomer and Echo (@BoomerandEcho) August 2, 2024

On a personal note, we’re enjoying the Olympics and watching some locals compete (Paige Crozon and Kacie Bosch on the Women’s 3×3 basketball team, Apollo Hess on the men’s swimming relay team, and Sarah Orban in cycling – women’s team sprint).

Promo of the Week:

Over the years I’ve had self-directed investing accounts at various brokerages like TD Direct, Questrade, and Wealthsimple Trade for one reason or another.

But I’d prefer to have all of my accounts on one platform, and my platform of choice is Wealthsimple. 

Simply put, Wealthsimple offers the best user experience, is truly commission-free (no pesky ECN fees like on the Questrade platform), and has all of the automations you’d want to make your DIY investing experience as hands-off and hassle-free as you want it to be.

I’ve recently moved a LIRA to Wealthsimple and the transfer process was incredibly easy – it took about 1 minute to initiate the transfer from Wealthsimple’s mobile app, and the transfer itself took just three days to move in-kind from TD.

Wealthsimple even proactively reimbursed the $150+HST transfer-out fee that TD charged me. 

I’m patiently waiting for Wealthsimple Trade to offer corporate investing accounts and RESPs, and then my transition to one platform will be complete.

And right now, until August 31st, you can get a 1% match (cash back incentive) when you register and then deposit or transfer over $15,000 to your Wealthsimple Trade account. 

Use my referral code: FWWPDW and open your Wealthsimple account today.

There’s no limit either, the more you fund, the more cash back you earn (cash back paid over 12 monthly instalments).

Weekend Reading:

Morningstar’s Christine Benz shares 20 lessons for a successful retirement.

Retirement brings with it a host of questions. The No. 1 question: Do we have enough for a financially comfortable retirement?

Globe and Mail reader Troy Brooks explains why retirement is his third act:

“My advice to others is that if you want to retire – and it makes sense financially – do it. Work can easily become your default purpose in life, but none of the friends and family we lost during the past few years wished they had spent more time at work. I think of retirement as my third act, in which all the plot points of life come together to what I hope will be a satisfying conclusion.”

However, this retirement and longevity researcher explains why your endless summer retirement dream is a fantasy.

I’ve often said that pairing low cost do-it-yourself investing with on-demand financial planning advice at key life stages is a recipe for great financial outcomes. But some people aren’t cut out for DIY investing. The Rational Reminder podcast hosts help explain when you should hire a financial advisor:

Your kids believe it’s time for someone else to manage your money, but you’re used to doing it on your own and want to save on fees. What are your options? An important read for retired self-directed investors.

Longevity is the key to managing retirement savings, but using rules of thumb like planning to age 95 may be a poor fit for some people:

“We need to recognize that many retirees are underspending in retirement and have the potential for a better quality of life.”

Finally, the always entertaining Jamie Golombek (who, along with Tim Cestnick and Mark Goodfield, is one of the few writers who can make tax planning interesting) takes on the CRA over home-office expenses.

Have a great weekend, everyone!