{"id":3606,"date":"2022-03-24T11:14:10","date_gmt":"2022-03-24T15:14:10","guid":{"rendered":"https:\/\/www.focussf.ca\/what-to-do-during-a-stock-market-correction\/"},"modified":"2022-03-24T11:28:31","modified_gmt":"2022-03-24T15:28:31","slug":"what-to-do-during-a-stock-market-correction","status":"publish","type":"post","link":"https:\/\/focussf.ca\/en\/what-to-do-during-a-stock-market-correction\/","title":{"rendered":"What to do during a stock-market correction"},"content":{"rendered":"<p>Investors aren\u2019t lacking for things to worry about at the moment, including Russia, inflation, the rate hike, the market downturn, the real estate market, the labour market, the pandemic, and supply chains, to name but a few. I can, of course, assess each of these issues and share my opinion with you, but it wouldn\u2019t be of much help since the only crucial factor to keep in mind is that no one can predict the future!<\/p>\n<p>No one could have predicted the dramatic market upswings of 2020 and 2021 despite the worst pandemic outbreak in a hundred years.<\/p>\n<p>When the stock market is dropping, investors have three options:<\/p>\n<ul>\n<li>Do more<\/li>\n<li>Do less<\/li>\n<li>Do nothing<\/li>\n<\/ul>\n<p>Typically, in many areas of our lives, doing more leads to better results. This is true for sport, where more training is rewarded with performance improvements. Similarly, more studies yield better results, and so on and so forth.<\/p>\n<p>It doesn\u2019t necessarily work that way for investments. There appears to be an inverse relationship between effort and outcome. Often, the more investors try to do, the worse the results. This may seem counter-intuitive, but, sadly, it\u2019s true. Combine this with poor timing, and bad results get even worse.<\/p>\n<p>With the benefit of hindsight, predicting dips in correction periods seems so easy, but it remains impossible in real time. People\u2019s innate reflex is to assert control in times of crisis, and it\u2019s easier to make costly mistakes that way. The way to come out on top in a stock-market correction is to limit mistakes, just like a game of tennis or NHL hockey.<\/p>\n<p>That\u2019s why it\u2019s important to make sure that your portfolio is in line with your investor profile and well-diversified prior to corrections, because once the stock market starts to drop, it\u2019s too late to reduce your risk exposure. Stock-market corrections have various causes, and you should know that there is no perfect instrument that can protect you equally well in times of inflation, deflation, bull markets, bear markets, rising interest rates, falling interest rates, peacetime, wartime, recession, growth or any other situation\u2026 which is why it\u2019s important to be well-diversified!<\/p>\n<p>Stock-market risk is not new; corrections are perfectly normal and part of the stock-market cycle. Unfortunately, this is the price we have to pay to achieve a decent return for a comfortable retirement. Investors need to stay rational. This requires patience, discipline, and the ability to ignore short-term fluctuations.<\/p>\n<h6>* Inspired by this article: https:\/\/awealthofcommonsense.com\/2022\/02\/the-3-ways-to-win-during-a-market-correction\/<\/h6>\n<pre style=\"text-align: center;\"><em>The information contained in this article were prepared by Sylvain Lapointe, an Investment Advisor attached to: PEAK Securities Inc.; they were obtained from sources we believe to be reliable but are not certified and may be incomplete. The author is not responsible for readers\u2019 financial decisions following this reading. The views expressed here do not necessarily reflect PEAK Securities Inc. PEAK Securities Inc. is a member of the Canadian Investor Protection Fund.<\/em><\/pre>\n","protected":false},"excerpt":{"rendered":"<p>Investors aren\u2019t lacking for things to worry about at the moment, including Russia, inflation, the rate hike, the market downturn, the real estate market, the labour market, the pandemic, and&hellip;<\/p>\n","protected":false},"author":2,"featured_media":3597,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[143],"tags":[264],"class_list":["post-3606","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-info","tag-market-correction"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/focussf.ca\/en\/wp-json\/wp\/v2\/posts\/3606","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/focussf.ca\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/focussf.ca\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/focussf.ca\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/focussf.ca\/en\/wp-json\/wp\/v2\/comments?post=3606"}],"version-history":[{"count":8,"href":"https:\/\/focussf.ca\/en\/wp-json\/wp\/v2\/posts\/3606\/revisions"}],"predecessor-version":[{"id":3614,"href":"https:\/\/focussf.ca\/en\/wp-json\/wp\/v2\/posts\/3606\/revisions\/3614"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/focussf.ca\/en\/wp-json\/wp\/v2\/media\/3597"}],"wp:attachment":[{"href":"https:\/\/focussf.ca\/en\/wp-json\/wp\/v2\/media?parent=3606"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/focussf.ca\/en\/wp-json\/wp\/v2\/categories?post=3606"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/focussf.ca\/en\/wp-json\/wp\/v2\/tags?post=3606"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}