Well, that was something!
In March of last year, after a precipitous drop of 35% in global stock markets, TheAnswerIs.ca Model Portfolio stood at $107,513. Twelve months later, it is at $153,103, a gain of 42.40%. If there was ever a year that clearly illustrated that an investor should buy / hold for the long-term, and ignore the noise, the past year was it!
Investors need to remember that the Bear is just sleeping now, and there is a 100% probability that the Bear will awaken at some point, and stock markets will again convulse downwards by 20-50%. Notwithstanding arguably one of the worst Bear markets ever recorded (especially in terms of speed), TheAnswerIs.ca Model Portfolio is averaging a return of just over 10% per year, clearly illustrating that an all-equity portfolio is extremely volatile, but does provide attractive longer-term returns.
The next time the Bear awakens, we know an investors best defense is to simply... “hibernate”, collect their dividends, and wait for Bear to wander back into his cave. TheAnswerIs.ca Model Portfolio includes ETFs in the utilities and real estate sectors, which pay dividends every month, even during a downturn. Collecting dividends during a market downturn is like getting “paid to wait” for a portfolio to eventually recover from a downturn.