How should investors deal with mass uncertainty in global financial markets? Should you adjust your portfolio or reassess your financial plan?
Personal finance and investing guru Gordon Pape answered your questions in a live chat Tuesday.
Gordon Pape is publisher of the Internet Wealth Builder, Income Investor, Mutual Funds Update, The Canada Report. His website is www.buildingwealth.ca.
He is author of the book, Tax-Free Savings Accounts: A Guide to TFSAs and How They Can Make You Rich .
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11:01 [Comment From Ron]
Mr. Pape, Is this a good time to invest in a fund such as RBC Global High Yield Bond Fund, that invests in high yield and emerging market bonds?
11:02 [Comment From Ken]
Should I be worried as a holder of diversified mutuals in Canada?
11:02 [Comment From Gordon Pape]
The risk is much higher in this type of bond fund compared to a normal bond fund. That's because the credit-worthiness of the securities it holds is low - and credit strength is a major issue right now.
11:04 [Comment From Gordon Pape]
To Ken - A falling tide lowers all boats and that's what will happen if the markets renew their downward slide. Blue chip, dividend-paying stocks are the best bet but they would be hit too as in 2008-09.
11:04 [Comment From Rob]
34 yr old with about 100k uninvested right now, thinking of putting it all into index etfs today. Thoughts?
11:05 [Comment From Gordon Pape]
Well, I wouldn't do it. Markets are very volatile right now. This rally might be real or just a "dead cat bounce". I'd wait until things settle down and direction is more clear.
11:06 Chantaie ROB web editor - Mr. Pape, would you see the current volatility as an opportunity to enter the market as an investor? Or should new entries be holding off?
11:07 [Comment From Gordon Pape]
If you remember 2008-09, we had some rallies after the initial sell-off but then the downward slide resumed and continued until March '09. I am not saying the same thing will happen again but it is a possibility
11:07 [Comment From Leonard ]
What should someone with some money to invest look at in today's volatile climate? I just caught up on my TFSA (all in cash right now) and have money to catch up on my RRSP carry forward. Should I wait for further drops? Start buying in slowly (once per month or so)? What sectors and regions should I be looking at?
11:09 [Comment From Gordon Pape]
I like short-term bonds or bond funds such as XSB right now. Also gold - not the stocks but the metal or a fund/ETF that invests in the metal.
11:09 [Comment From Dave]
I work for a BC Crown Corp in an investment dept and we have a very strict code of ethics and restricted from owning bonds & have to report any investments for compliance. I can own mutual funds and equities but require 5 days preclearance to buy or sell any equity which makes individual stocks a pain. What can I invest in? I can can invest in mutual funds but what type?
11:10 [Comment From Gordon Pape]
Short-term bond funds are safe bets in this situation. Phillips, Hager & North in Vancouver has a great one
11:10 [Comment From Brad]
Do you think that some of the current crash can be attributed to the use of automated market tracking programs coupled to the holiday season? Assume a normal distribution of sell points, and unattended programs -- and one has a cascade of effects. Once sold, while the markets fall, all one can do is wait for the bottom. Do you advocate the use of such devices?
11:11 [Comment From Gordon Pape]
No I certainly don't and there were some controls put on them after the crash of 2008-09. I have not seen any suggestions that they were major contributors to what happened yesterday
11:11 [Comment From Jack]
With CIBC and other banks having a near 5% yield and buy ratings, is now a decent time to get in
11:12 [Comment From Gordon Pape]