Global conflict and the market: What you need to know
Short-term ups and downs are a normal part of investing, and retirement saving is designed with a long-term horizon in mind. Staying focused on your goals is often more important than reacting to today’s news.
What’s driving recent market movement
Situations like the current conflict in the Middle East, can increase uncertainty for global markets, particularly when they raise questions about energy supply, trade routes, or broader economic stability.
Even though the longer-term economic and investment impacts are not yet clear, markets still react. As an investor, it’s important to remember that these fluctuations reflect how the markets process new information and do not necessarily indicate long-term outcomes.
Putting volatility into perspective
Volatility simply means that prices can move up and down—sometimes quickly. While this can be uncomfortable, it is not unusual. Diversified portfolios are designed to help spread risk across different types of investments, so no single event drives long-term results.
A long-term view for retirement savers
While global events can influence markets in the near term, retirement strategies are built to navigate a wide range of conditions over many years.
Things you can do to help protect your finances:
Don’t panic with your investments
- Think things over carefully. Avoid making rash financial decisions during challenging economic or political times. · Resist the urge to pull money out of your RRSP or other investments. Selling market-based investments could result in long-term losses to your portfolio’s value. With Sun Life One Plan, you can simplify decisions and create a personalized financial roadmap to help keep you on track. Log in to your account to get started. · Focus on the fundamentals: keep a diversified portfolio across sectors and geographies. If you selected your own investments, review your asset mix and update your risk tolerance in your Sun Life account.
- If your Sun Life plan(s) are invested in Target Date funds, your asset mix automatically adjusts over time—gradually shifting from a growth focus to more conservative allocations.
- As you approach retirement, this 'Help-Me-Do-It' approach helps to ensure your portfolio remains aligned with your retirement timeline throughout your savings journey.
Frequently Asked Questions
Because historically the markets have bounced back and recovered. Many different events have sparked volatility in the past. In all these cases, you’ll see a cycle.
"When markets become volatile, they move to the downside, but then they recover," says Sun Life advisor Brian Burlacoff. "The pattern here is that markets are always upwardly biased in the long run. A diversified portfolio is always upwardly biased in the long run."
When you sell on a down market, you lock in those losses. Then, once you’re out of the market, you’ll have to decide when to get back into the market. And when markets recover, they tend to recover swiftly, significantly and unexpectedly. If you miss that recovery, it can have a substantial impact on your investment portfolio.
It depends on how the situation evolves in the coming weeks and months. Market volatility is normal. You may be better off staying the course and sticking to your original plan if:
- Your goals haven't changed, and
- You have a diversified portfolio.
Remember, history tells us that markets grow over the long term.
- If your employer offers group benefits from Sun Life, you can check your coverage and find the support you need on My Sun Life
- You can find a mental health professional near you with Sun Life Provider Search
- If you have employee benefits at work, check to see if it includes an Employee Assistance Program (EAP). This program often offers free virtual counselling or therapy sessions for employees and their families.
This article is meant to only provide general information. Sun Life Assurance Company of Canada does not provide legal, accounting, taxation, or other professional advice. Please seek advice from a qualified professional, including a thorough examination of your specific legal, accounting and tax situation.