Investing during times of world turmoil – what strategies are out there?

There’s no question – amid wars around the globe and a tricky trade war here at home – that we are living in unusual times.

What, if anything, should investors be doing during this latest bout of world turmoil? Save with SPP took a look around to see what strategies commentators are suggesting to ride out the storm.

Writing in The Globe and Mail Gordon Pape suggests taking “part profits,” or selling off some of your holdings.

“I don’t like selling in times of adversity. In fact, most financial experts suggest the opposite course: buy when prices are weak. But we’ve enjoyed strong stock markets in recent years, and you may hold securities that have more than doubled in value, even after last week’s pullback. Taking some of that money off the table and holding it in reserve in case the situation further deteriorates isn’t a bad idea,” he suggests, adding that you should first “check out tax consequences” and not “overdo it.”

He suggests we “check out commodities. Wars are bad news for stocks and bonds. But they can lift commodity prices, as we’ve seen with oil and gas.”

Keep an eye out for “special situations,” or companies that are doing well because of the crisis, such as energy stocks (due to impacts on oil shipping). He adds that we should consider holding some gold, as the precious metal can be a hedge against inflation and is considered a “safe haven” investment. He concludes by suggesting we all keep a bit more money in the U.S dollar, as it is “holding up well so far. Part of your cash holdings should be in greenbacks.”

He suggests things “will get better, so keep your cool and take advantage of situations as they arise.”

Writing in the Financial Post, Peter Hodson of 5i Research suggests one strategy is to be contrarian, and “buy the fear.”

“When investors panic we will often start buying. It has proven to be a good strategy, since every market downturn has ended at some point,” he continues. Sectors like energy may do quite well in these times, he adds.

“Oil of course is always a strategic asset during times of war. In the current conflict, the threat of the Strait of Hormuz closing has resulted in a big spike in oil prices. The energy sector was already doing well before this war started but has picked up steam since then,” he writes.

Gold, he concludes, “can be a good place to hide out when worried about global events, financial crises, or wars.”

An article from MoneySense from three years ago makes some still-valid points.

Alan Small writes that there is often “not a lot” investors can do when faced with a time of crisis.

“When markets sell off for reasons that are more temporary than related to economics and performance, it’s important to take emotion out of decision-making and not go into panic mode about your investments,” he writes. “Markets may dip, but they don’t usually collapse. It’s possible your portfolio’s value may drop for a period of time. In the past, after a crisis has ended—and regardless of the outcome—the markets have regained stability, and investment returns have bounced back.”

“My best advice in the face of a world crisis: Stay calm, take a deep breath and focus on the fundamentals,” he advises.

Before adopting any new investment strategy it is a very prudent idea to talk to your financial adviser. If you don’t have a financial adviser, now might be a very good time to get one and leverage their experiences with managing through things like the Tech Wreck, the World Financial Crisis and the COVID-19 Pandemic.

If you’re not experienced with managing money, but want to save for retirement, the Saskatchewan Pension Plan might be a valuable saving partner. SPP is open to any Canadian who has registered retirement savings plan room.

You can contribute any amount you choose to the plan (up to your annual RRSP limit) and can transfer in any amount from other RRSPs you might hold. Once SPP has received your savings dollars, our job is to grow them via investment in our professionally managed, low-cost pooled fund.

At retirement, your job is to receive your grown savings as income, with options including the security of a lifetime monthly annuity payment or the more flexible Variable Benefit.

Check out SPP today!

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There’s no question that this era of inflation – where interest rates have jumped more than they have in decades — is squeezing Canadians.

One category that is suffering from this period of tight spending is charitable giving.

According to the Kingston Whig-Standard, “the number of taxpayers who gave to charitable causes dropped to 17.7 per cent in 2021 — a 20-year low, according to the Fraser Institute’s annual report measuring generosity in Canada,” the Whig reports. “Charitable giving hit a high in 2004, with 25.4 per cent of tax filers making donations, but gifts to charity have dropped each year since. Twenty-three per cent of taxpayers gave to charity in 2011,” the newspaper adds.

Compounding the problem is that those who do give are also giving less, the Whig continues. Donations represented 0.55 per cent of income in 2021, down from 0.58 per cent in 2001.

“The data shows Canadians are consistently less charitable every year, which means charities face greater challenges to secure resources to help those in need,” states the Fraser Institute’s Jake Fuss in the article.

The folks at Canada Helps an organization that assists charities with fundraising and has helped raise a whopping “$2 billion in giving” since its inception 23 years ago, see the decline in giving as a serious societal problem.

In their 2023 Giving Report, the organization notes that “the rising cost of living and prolonged impacts from the pandemic have more Canadians in need of charitable services. At the same time, fewer Canadians are making charitable donations.”

Canada Helps notes that while two in 10 Canadians “expect to use or are already using charitable services within the next six months,” the percentage of Canadians that give “is down five per cent in the last 10 years.”

The report notes that:

• 40.3 per cent of charities “have experienced a lasting increase in demand” since the pandemic began
• 55.2 per cent of charities have fewer volunteers
• 57.3 per cent of them can’t meet current levels of demand
• 41.8 per cent are worried about attracting more volunteers

What sorts of things are charities doing? A recent MoneySense article looked at what they called the “top 100” charities in Canada, and the impressive work they do.

According to the article, charities help distribute food via food banks and community kitchens, help deliver education programs, support people struggling to break addictions, provide rural communities with safe water supplies, help lower income folks receive specialized healthcare, and so on.

We all realize things are tougher than they have been. If you are in a position to support a charitable cause or two, consider doing so at an increased level this year. And if you don’t have cash to spare, perhaps you can consider volunteering, as so many organizations are in desperate need of such help.

Did you know that the Saskatchewan Pension Plan’s Variable Benefit option is open to all Canadian SPP members? This flexible retirement income option puts you in control of how much you want to withdraw from your SPP account, and when.

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