This year, 89% of stock market assets generated losses to investors, according to a Bloomberg analysis, an all-time high. You have to go back to 1920 to see such a large spike in terms of assets generating negative returns.
The causes
Rising dollar funding costs, the end of synchronized growth, and equity volatility have weighed on assets around the world. Until October 2018, only U.S. equities were generating acceptable returns. Since mid-October, $2 trillion has evaporated in value in a matter of weeks.
According to Bloomberg, there are several factors affecting the markets: the trade war between China and the United States, the Brexit, the weakness of economic stimulus programs in Europe and finally the uncertainty caused by the oil policy of the Arab states.
Therefore, we need to be patient and think long term.
Recently, the Autorité des marchés financiers, the organization mandated by the Quebec government to oversee Quebec's financial markets and assist consumers of financial products and services, published a table on the volatility of different types of investments.
As you can see, there are few low-risk or low-volatility types of investments in this chart.
Since you are investing for the long term, there is no reason to panic. Already since the beginning of the year, the market has been on a roll. Your portfolios are built to ride out these bumps in the road. However, if you would like to visit us to discuss this, please feel free to call us.
Source: markets according to Bloomberg, October 25, 2018