29 February 2024
Capital Markets and Strategy Team
While investing in volatile times can sometimes challenge your discipline and commitment, there are timeless principles to include in your investment strategy that can help ease your mind and keep you focused on the long term.
It’s rare for any investment to repeat as a top performer from one year to the next. Diversifying across various economies, businesses, countries, and popular investment classes can help spread risk, remain more consistent, and reduce the potential for underperforming assets to impact your portfolio.
Historical asset class rotation, 2013–2023
Calendar year total returns by class assets (%)
Source: Manulife Investment Management, Bloomberg, as of 31 December 2023. Total returns are shown in local currency or in USD for multimarket indexes.
In good times, investors are excited, they want to invest more and often “buy high.”
When markets turn negative, investors become fearful and decide to cut their losses and “sell low."
Stay disciplined and committed to your long-term investment plan to avoid riding the emotional roller coaster.
Watch a video on this topic (49s)
An investor’s emotional roller coaster
Source: John Hancock Investment, a company of Manulife Investment Management. This chart is an example and does not represent the performance of any actual investment. This is not meant as investment advice. For illustrative purposes only.
The difference between investment success and disappointment can boil down to a few days of being in or out of the markets.
By staying fully invested and not missing the best investment days in 2023, investors could have outperforming returns.
Watch a video on this topic (42s)
2023 S&P 500 Price Index
Fully invested vs. missing the best days
2023 The Bloomberg Global Aggregate Index
Fully invested vs. missing the best days
2023 The Bloomberg US Aggregate Index
Fully invested vs. missing the best days
Source: Bloomberg, Capital Market and Strategy Team from Manulife Investment Management. As of 31 December 2023. The charts are examples and do not represent the performance of any actual investment. This is not meant as investment advice. For illustrative purposes only.
Accept the fact that markets will rise and fall but over time markets have always moved higher.
Taking a long‑term perspective can help you stay the course when markets move from crisis to opportunity and back again.
Despite setbacks, the MSCI World Index shows growth over the long term
Growth of USD$10,000
Source: Bloomberg, Manulife Investment Management, as of December 31, 2023. For illustrative purposes only. Red circles indicate periods of market decline. The index is unmanaged and cannot be purchased directly by investors. Past performance does not guarantee future performance.
By investing a fixed dollar amount in regular intervals dollar cost averaging can help you buy more units of an investment at lower prices and fewer at higher prices.
This helps take the worry out of making a single lump-sum investment at the wrong time.
12-month comparison
$12,000 single lump-sum investment vs. $1,000 monthly investment using dollar cost averaging
For illustrative purposes only.
How to Set Smart and Effective Financial Goals
In previous episodes, we have explored creating a financial plan and establishing a budget that accounts for your current expenditure. The third step is to build a strategy that will help you accomplish either a short-term or a long-term financial goal. We will guide you on your path by providing financial goal examples and introducing SMART (specific, measurable, attainable, relevant, time-based) objectives that help clearly define what you want to achieve in the years ahead.
5 ways a budget plan can help you manage your finances
We all know approximately how much money we need each month. However, without a clear spending strategy, you could see a shortfall in savings, face a lack of day-to-day cash, or be caught off guard by unexpected costs. That’s why it’s important to have an effective budget plan that will give you control over your finances.
Risk Diversification
There is no free lunch. But Risk Diversification comes close in investing. A diversified portfolio was shown to optimize returns with lower volatility in the long run.
Not another bubble: How semiconductors are powering a real future
Semiconductors sit behind almost every modern experience – from smartphones and cars to cloud computing and today’s AI tools – yet they remain largely invisible to most people. They are more than chips only, and the demand is being supported by several long-term forces. We believe that today’s semiconductor excitement is not a repeat of the dot-com bubble, as investment is tied to real infrastructure and revenue-generating services. And the opportunity is broader than a handful of headline AI names.
Global Equity Diversified Income (GEDI) strategy update: Risks and opportunities
In early April, developments in the Middle East showed signs of stabilisation, prompting a partial recovery and renewed risk-taking in equity markets. However, beyond ongoing geopolitical risks, other factors—including potential private credit contagion across banks and broader financials—continue to pose downside risks. Despite these uncertainties, we believe an income centric approach, combined with global diversification across growth, value and income equities, has provided both downside resilience and upside participation for the Global Equities Diversified Income (GEDI) strategy.
How to Set Smart and Effective Financial Goals
In previous episodes, we have explored creating a financial plan and establishing a budget that accounts for your current expenditure. The third step is to build a strategy that will help you accomplish either a short-term or a long-term financial goal. We will guide you on your path by providing financial goal examples and introducing SMART (specific, measurable, attainable, relevant, time-based) objectives that help clearly define what you want to achieve in the years ahead.
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