Avoid economic whiplash and invest for the long termPerhaps the best advice we can suggest tocompletely different directions on which way the There is a useful strategy that investors caninvestors is to stop reading financial news. It iseconomy was headed.use to avoid the normal pitfalls of relying onconfusing, contradictory and often just plainOne day's quotes were all doom and gloom. conflicting periodic news reports and volatileDollarssilly.Comments like full-fledged correction, rais-stock markets. Invest for the long term.There is a conflict of log&ic and many coulding fears and strategists say the recent declines You might have heard the popular expressionargue there is no logic. reflect a collection of negatives.it is not timing the market, but the time in theSenseA recent Globe and Mail headline in theThe Canadian stock market had just com-market. Short term noise can be drowned outReport on Business wasInvestors Feel Economicpleted a three-month decline of close to 10 per by taking a long-term approach.By Peter WatsonChill. I would assume for any investor who readcent. That decline followed a 10-month rise in The best tool available is to have a writtenthat discouraging news they would be con-stock prices.Investment Policy Statement. That documentcerned.There was a prediction with the prospects will list your investment objectives and breakDid that motivate some to actually sell a por-for economic growth uncertain at best, stocks down the diversified portfolio that you shouldHowever, one day later a new headline in the tion or all of their holdings? Likely, the answer ison both sides of the border may have further to construct.same paper was Markets Leap as Economic Data yes.fall.Consider this document your architecturalBrightens. So over a two-day period we had two So now lets fast forward by 24 hours and see plan on how to construct your portfolio; similar what happened. The TSX composite index rose to architectural plans you might use to con-slightly more than it had dropped the day before struct a house. TURN YOUR VISION and posted its best one-day gain in nearly a It would be helpful to have some historicmonth.information about the type of past volatility thatINTO REALITYSuddenly the quotes and comments from your portfolio structure might have had for theexperts were buoyant such as the financial mar-past several decades. This will help you manageCALL TODAYkets enthusiastic about-face on a bite of positive your expectations.news. There were renewed hopes and better-The Investment Policy Statement is your For Your FREE than-expected retail sales data out of the United best tool to help guide your investment logic. Design States. This type of news mood swing is enough This can make you less likely to allow short-termLANDSCAPE CONTRACTOR Consultation M e m b e r o f L a n d s c a p e O n t a r io Est. 1993to give investors economic whiplash. news to control your long-term investing.The reality of the stock market is that there If you have planned properly, there is noare millions of moving parts that affect its per-reason for either case to alter your long-term31 DUNDAS ST. E. (HWY 5), WATERDOWN, ON L9H 7H8formance. When there is a prediction on the strategy.future direction of the market, to be fair, the Submitted by Peter Watson, MBA, CFP,Showroom 905.689.1880prediction is just a wild guess.R.F.P., CIM, FCSI. In 1991, Peter founded PeterIn the long-term the markets have been very Watson Investments in Oakville. Peter can bewww.oasisgardendesign.compredictable. By contrast, in the short-term, they reached at 905-842-2100 or visit the website atare most definitely not. www.peterwatsoninvestments.com.www.insideHALTON.com OAKVILLE BEAVER Thursday, June 30, 2011 14