BMO Financial Group

BMO Financial Group

August 10, 2011 10:04 ET

BMO: Don't Let Market Turbulence Rain on Your Summer Vacation

BMO provides tips for Canadian investors to protect their portfolios while on holiday

TORONTO, ONTARIO--(Marketwire - Aug. 10, 2011) - With the volatility of the financial markets at its peak in recent days, keeping up with investments is a priority for Canadian investors. However, with August being typical vacation time for many Canadians, it is often difficult to stay current with the news, let alone keep up with investments.

"This summer has seen a high degree of market volatility, and although many Canadians use the summer as a time for rest and relaxation, their portfolios still require monitoring," said Serge Pépin, Head of Investments, BMO Investments. "Even though life traditionally slows down during this time of the year, it is essential that we continue to pay attention to our financial portfolios in order to minimize risk."

Serge Pépin offers the following tips to ensure that market forces do not get in the way of a worry-free summer vacation:

  • Check-in ahead of time – Prior to heading off on vacation, be sure to advise your financial advisor of your vacation plans. By doing so, it will ensure that you can be contacted in the event of potentially significant market events.
  • Read the headlines – Stay aware of the current events that may have the potential to move financial markets. Ask your financial advisor how the make-up of your portfolio will be able to sustain the possibility of increased volatility.
  • Do not panic – As hard as it may be, try not to overreact and make impulsive moves with your investments, especially equities.
  • Seek out expert opinion – In order to gain a better understanding of how an event will impact the financial markets over both the short and long term, seek out reliable sources and trusted and respected experts who are in a position to assess the situation accurately. This should include speaking to your financial advisor who can ensure your portfolio is meeting your financial goals and reflects your risk tolerance.
  • Consider buying into the downward trend – Often financial markets, especially stock markets, will over-react to local or global events, falling sharply only to come back with a vengeance. This is why selling into these types of environments can be detrimental to your portfolio. In fact, with proper research and due diligence, during periods such as these you may be able to find some attractive opportunities at favourable prices.
  • Re-examine your portfolio – Although investment portfolios should always be reviewed at least once a year, market upheavals are a good prompt to examine your portfolio for diversification and market exposure. Keeping your portfolio balanced, with a mix of equities, bonds and cash, can help protect it from fluctuating markets.
  • Look forward – Think about arranging for a meeting with your financial planner following your vacation to discuss your portfolio and current financial situation. The meeting will likely uncover new opportunities for you to explore and consider for the upcoming year.

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