Dear Clients:

Today’s dramatic sell-off has brought year-to-date returns to -49% for the S&P/TSX and -51% for the S&P 500; global markets are down even more, in some cases -75%.

The GIM model portfolios have fared much better: Cash +2.5, Bond +3.34%, Balanced -30.46%, Blue Chip -38.67%, Aggressive -44.31%. 

While portfolio losses are difficult to grapple with in the short-term, we must try not to lose sight of our medium and longer term investment goals.

The lessons of prudent investing have taught us at GIM a few things:

• Markets react violently from time to time, but extreme moves are only temporary – markets recover.
• Some of the sharpest declines on record have been followed by equally powerful rallies; we should not attempt to time the market too closely as this can lead to permanent losses or lost opportunity.
• Reinvesting income and periodic portfolio rebalancing ensures that you actually “buy low” and “sell high”.  Today, for example, our Balanced Portfolios sold bonds at a profit and bought units of the Toronto Index (XIU) at deeply discounted prices.