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Auto, Home, Commercial, Life, Travel ADRIAN KEITH BARBARA SIEK P. 905.847.0400 | F. 289.801.0235 akeith@all-risks.com | bsiek@all-risks.com NEW LOCATION: 2345 Wyecroft Rd., Unit 18, Oakville (behind Terra Greenhouses, Hwy. #5) 2273 Hwy. #5 905-336-7725 Plus a large selection of rockery and flagstone www.burlingtongardens.ca 1 YardSoil SacsDELIVEREDStarting at$109 (plus taxes& deposit) Top Soil Triple Mix Manure Pebbles Manured Loam Black Loam Mulches Aggregates Grass Seed Top Dresser & Bins for Rent Delivery or Pickup Available w w w .i n si d eH A LT O N .c o m O A K V IL LE B EA V ER Th ur sd ay , S ep te m be r 8, 2 01 1 1 2 Managing your expectations isan important part of success-ful investing. This is particu- larly true during times of extreme stock market volatility like we have experi- enced during the last few months. Expectations play an important part in determining how investors react to economic events. Expectations are like- ly factors in how you react as well. How others react to economic news affects the markets. How you react can affect your life savings. This is a good time to review what has happened with the econo- my over the recent months and how investors have reacted. It has been anything but a quiet summer. Unemployment in the U.S. is high and many fear the coun- try will fall back into a reces- sion. Several European countries are also having debt problems. It seems we have had an endless wave of negative economic news lately. Many investors are nervous and that is normal. The result was that the stock markets were very volatile and the value of investor portfolios declined. Again, that is all normal. Our recommendation is to have the risk conversation with your investment advisor. Talk frequently about stock market risk and your reactions to it, instead of waiting until you panic and potentially make a poor investment decision. It is critically important to have expectations of how your investments might perform. Expectations affect our invest- ing emotions and those emo- p ytions are res onsible for man of our investment decisions. Perhaps it would be helpful for you to discuss previous mar- ket declines and recoveries with your advisor. History never repeats itself exactly the same way, but at least it would give you a sense of the range of declines your portfolio could be subject to. Why do this? It is because you need to take some of the emotion out of play. If investors begin to expect these short-term recoveries and they dont materialize, how will they react? If there is a long period of investment portfolio decline will they panic and then sell at the worst possible time? That is why you should talk with your advisor. What types of investments do you own and if they decline, how far might they go down? Are you prepared for that? How will you react? What are your expectations? Our last two columns have discussed the fact that invest- ment risk and volatility is nor- mal and should be expected. The logic is for you to take risk in order to make a return. Higher risk means higher return, right? Well, that depends on the time frame we are talk- ing about. It is a good idea to under- stand what type of return on investment you require in order to be successful. Structure your portfolio conservatively in order to get the desired return and do not assume unnecessary risk. fUnderstanding the reality o investment returns and volatil- ity is crucial in order for you to have realistic expectations. Invest the time now, so you can become a more informed inves- tor to make better investment decisions. Submitted by Peter Watson, MBA, CFP, R.F.P., CIM, dFCSI. In 1991, Peter founde Peter Watson Investments in dOakville. Peter can be reache at 905-842-2100 or visit the website at www.peterwatsonin- vestments.com. Dollars & Sense By Peter Watson Manage your success by managing expectations