CDA Essentials 2018 • Volume 5 • Issue 4

FIVE WAYS “INVESTMENT Markets are unpredictable. Volatility is inevitable. And sometimes it feels like things are out of your control... which can often lead to restless sleep. 1 KEEP EMOTIONS OUT OF INVESTMENT DECISIONS Market volatility can create a roller coaster of emotions. Everyone wants to “buy low, sell high,” but if you let your emotions get in the way, you’ll likely do just the opposite. There is no way to accurately predict changes in the market. Missing just a handful of the best days can have an enormous effect on your wealth. If you invested $100,000 in the S&P 500 in 1989, it would be worth more than $1 million today. But if you missed just the best 10 days of performance, you would have missed almost half the returns! A professional advisor can help you stay on track through uncertain times. 2 BEWARE OF FEES Investors need to be aware of the impact fund management fees have on investment returns. What difference does a 1% reduction in fees make? The chart shows that over the long term, it is significant. As a member benefit, you have access to CDSPI investment funds with low fund management fees which means your savings grow faster (see point 5). HERE’S A GOOD WAY TO LOSE SLEEP Miss the Best Days in the Market Total value of $100,000 invested in the S&P 500 since 1989 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Sources: Morningstar Direct, Wells Fargo Investment Institute, December 31, 2017. For illustrative purposes only. Past performance does not guarantee future results. An index is unmanaged and not available for direct investment. 1% DIFFERENCE Returns on an investment of $500,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 3 DIVERSIFY TO DECREASE RISK The winning stock or asset class varies wildly each year, so it’s never a good idea to invest too much in one category or stock. By staying diversified—the golden rule of long term investing—you can decrease your portfolio volatility and avoid wide fluctuations. Not sure if you’re diversified enough? Call CDSPI to discuss or have a complimentary portfolio review. Chi Wen Liang , BComm, CFP ® Manager, Investment Advisory Services, CDSPI Advisory Services Inc. $1,048,118 $518,336 $323,051 $214,213 $146,660 Remain Fully Invested Missing 10- Best Days Missing 20- Best Days Missing 30- Best Days Missing 40- Best Days 20 Years 30 Years 40 Years $577,123 $244,939 $1,209,273 38 | 2018 | Issue 4