How often have you heard someone say, “I made so much money in the stock market today”? I personally hear it very often, especially when stock markets are doing so well. When someone says that I always get worried because it is usually not true. Before you crucify me, I am not saying that these people are liars. They have just fallen victim to a common misconception when investing- that you make money when your investments go up in value and you lose money when they go down.

With the U.S. Federal Reserve Bank (Fed) chairman, Jerome Powell, signaling a faster pace of tapering or reduction of monthly bond purchases (liquidity support) ahead of Wednesday’s FOMC meeting, in response to hotter than expected inflation, market watchers and investors anxiously awaited the Fed’s next big reveal– the FOMC dot plot. So, what are the Fed’s dot plots and how useful are they for investors? 

As interest rates fluctuate or decline many investors often seek new products or consider restructuring their portfolio. Understandably declining rates can give rise to feelings of fear, anxiety or second guessing your investments. Investors who actively monitor their investments may become disenchanted with lower rates and begin to wonder what products they could take advantage of in their quest to have higher yields. There are many new issues in the market including local corporate and international bonds.

Before making any investment decision, it is important to first determine the objective of the investment and how it is aligned to your investment goals. By defining your goal, one can determine if the appropriate investment will need to provide growth, income, or a combination of both.

Broadly speaking, financial markets are made up of investors and speculators. Investing and speculating are not the same. The terms are often used synonymously due to common characteristics that they share and in today’s complex financial markets the line between the two has become blurred. However, there are key differences that you should understand to make sure that you are participating in something that is appropriate for you. 

Mirror mirror on the wall who is the savviest investor of them all? Many times, the new investor is looking to place their hard-earned money into an investment with hopes of achieving a stable return. With that mindset, this type of investor tends to be risk averse and will go for a “low risk” investment over one with a higher associated risk. However, it is important to understand that all investments have some element of risk. Risk is a part of life and in finance there is no crystal ball for us to predict the future.

In my July article, which was based on reasonable analyses and deductions, I predicted that the U.S. Federal Reserve Bank (the Fed) would likely start “tapering” in March 2022. Sadly, I was completely wrong. In my defence, however, I suggested then that the timeline could be brought forward based on incoming labour market and inflation data, which incidentally have surpassed market expectations since.

In a recent Sterling Asset Management panel discussion on Investing and Insurance, a question was raised that seems to be asked quite often. “Investing is only for the rich: how does someone start investing even though they may not have enough money?”