Investing in volatile times: How finance professionals deal with stressful, unpredictable market moves

Yahoo

20-02-2025

Canadians have faced a considerable amount of uncertainty so far this year, with the U.S. trade war perhaps the dominant source of stress within a stream of news not short on stressful stories.
Those with investments or thinking about investing must manage within a context that has seemingly unavoidable tariff narrative twists and turns — driving worries about the economy, inflation, the loonie, job market, interest rates, business development, you name it.
So how do professionals in the finance industry handle more intense points in the cycle? Yahoo Finance Canada spoke to three to understand how they navigate stressful times.
Keeping on top of what's happening in the world is useful, but making moves on the basis of every bit of news is not, says Craig Basinger, chief market strategist at Purpose Investments.
'If you're really going to keep changing your strategy based on headlines, you're going to end up chasing your tail and probably destroy a lot of potential returns out there just by being so reactionary,' he said.
It's better to step back and watch what's happening, Basinger says, and if the news is big, 'sleep on it' before reacting. 'Turn it off for a while. Step back and remember, investing for most people is a multi-decade-long journey.'
If you are tracking the news, make sure you aren't in an echo chamber, Karl Schamotta, chief market strategist with payments company Corpay, says. Having information sources that are too one-sided 'can cause tunnel vision and lead to a situation in which you are just doom-scrolling through life instead of seeing the big picture.'
He further counsels including longer-form material, such as books and considered blog posts, in one's information diet. 'It's easy to get lost in a bombardment of surface-level items that don't give you any understanding of the longer-term trends and fundamentals.'
Whatever the situation, keeping your goals and needs in focus is essential, Frances Horodelski, who has held senior roles in Canada's investment industry for decades, said in an email to Yahoo Finance Canada. 'Always remember why you are investing,' she wrote. 'What are your return needs, tax position, capital availability, short-term cash needs, risk tolerance, equity-to-fixed income allocation, etc. Always come back to the plan. I know it sounds trite, but it does work.'
It may also help to pause to define the circumstances as objectively as possible, says Purpose's Basinger. 'We're probably in for four years of a noisier environment than we had the previous four years,' he said. 'And you just have to sort of acknowledge that that's the environment that we're in. But if you go back historically, the market does run into bumps here and there … but it also creates wealth over the long term.'
Horodelski recommends staying focused on companies and how their approaches align with the headlines. 'Knowing your companies, what they do, where they sell, how they manage through the issues, what opportunities they may have etc. will allow you to be able to intelligently assess the final news, when it comes.'
Making sure your portfolio is hedged against volatility is also wise, Horodelski says, 'whether it's cash, or gold, or low volatility, low beta, low correlation assets that can buffer you from the swings.'
'As for self-care,' Horodelski wrote, 'I choose love." She further turns to various well-tested means of turning off the noise. 'Walking (lots of it), and distractions like movies, good TV, and reading non-business books (just finished Dave Grohl's memoir from a few years ago and looking forward to Anne Tyler's latest novel and probably Bill Gates' memoir) and chatting on FaceTime with my children.'
Basinger says that after experiencing decades of markets that move up and down with the news of the day, handling the next uncertainty has gotten easier. 'I think people who've been in this industry long enough, we've probably been through enough hair-raising environments that probably make us less reactionary than we would be otherwise.'
To him, that's a point in favour of having a financial advisor, 'because they're a little bit removed as well from the emotional side.'
For Corpay's Schamotta, the solution has four legs. 'I do think that having a dog is a way to balance out the world a bit. Mine helps me stay on a consistent schedule, forces me to interact with the real world more often, and provides (mostly) unconditional love.'
John MacFarlane is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jmacf.
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