Associated Press File Photo

By Sheldon Spackman

Keep Calm

Money manager advises not to panic during market turmoil

Mar 10, 2020 | 7:16 AM

Plunging stock markets are prompting at least one local money manager to call for calm and for investors not to panic.

Dion Zukiwsky, Branch Manager and Director of Wealth Management at Scotia Wealth Management in Red Deer, admits these are tough times for investors, but says it’s important to not make any rash decisions based on fear.

“Overall, investors have to be looking at why they’re invested in the first place,” he explains. “But as far as the markets go, I think we’re going to have some volatility for the time being.”

As an investor, Zukiwsky says your time horizon also needs to be considered.

“Are you investing for the next five days, five months, or five years or longer,” asks Zukiwsky. “That’s really the key.”

On the markets, the S&P 500 has lost 17 per cent since setting a record month in February. If it hits a 20 per cent drop, officials say it would mean the death of what’s become the longest-running bull market for U.S. stocks in history.

Monday actually marks the 11th anniversary of the market hitting bottom after the 2008 financial crisis.

“It’s a bit of a double whammy right now where you’re seeing most recently issues between Saudi Arabia, Russia and OPEC where the Saudis and Russians have decided they’re actually going to increase oil production,” says Zukiwsky.

“It’s really an attempt to grab market share because their feeling is that this coronavirus could affect the economy for longer than anticipated, so it’s creating a big drop in oil prices today. That’s sending a really negative message to the markets overall right around the world.”

Despite the major volatility currently hitting the markets, Zukiwsky says it’s important to note that it’s not erasing multiple years of gains.

“It has erased some, but at the same time, we will see a rebound,” says Zukiwsky. “There will be a re-acceleration to growth. The tricky part is, nobody knows when.”

From a money management perspective, Zukiwsky points out that many market moves are already built-in to an investor’s portfolio.

“Trying to make major sells and major adjustments right now is probably going to hurt you over the long-term,” he suggests. “So it’s best to do a very good evaluation of your risk tolerance, of your timeframes, and then make an educated decision there. Definitely don’t do anything based on emotion.”

Zukiwsky reiterates that his main message is not to panic in these types of environments.

“A lot of times it’s too late to sell, but too early to buy,” says Zukiwsky. “You just have to monitor things closely. If you have a good plan in place, then everything is going to be okay. We’ve seen this happen before, we’ll see it happen again. There will be future gains to be had, it’s just going to take a little bit of time.”

On Monday, Canada’s main stock index closed down 10.3 per cent to its lowest level in 14 months as a collapse in oil prices triggered a plunge in the energy sector.

The S*P/TSX composite index lost 1,660 points to close at 14,514.24.

In New York, the Dow Jones industrial average was down 2,000 points or 7.7 per cent at 23,864.08. The S*P 500 index was down 225 points at 2,746.70, while the Nasdaq composite was down nearly 625 points at 7,950.68.

The Canadian dollar traded for 73.54 cents US compared with an average of 74.51 cents US on Friday.

The April crude contract was down US$10.15 at US$31.13 per barrel.

(With files from The Canadian Press)