In the September edition of The Informed Investor, we explore how the markets are responding to the evolution of the pandemic and the valuable knowledge that can be gained from starting to invest.
The fundamentals of saving and investing are not always taught in school. So as we enter the back-to-school season, we want to share a reminder that even starting small as an investor can provide a valuable education on these topics. The earlier someone starts investing, the earlier they get interested in learning how to manage their money, and the earlier they begin to accumulate the knowledge that comes from real world experience as an investor.
Many investors learned important lessons during the market volatility experienced in the spring of 2020. They learned things that they may not have by simply reading a book or blog post: about their risk tolerance, the unpredictability of the markets, and how emotions take hold of investing decisions.
RBC Global Asset Management’s Chief Economist Eric Lascelles2 has stated that the reopening progress that was supported by elevated vaccination rates has since decelerated as countries take varying levels of caution in response to the spread of the Delta variant. Canada currently has the second highest vaccination rate globally and has taken a more cautious approach to reopening, which has mitigated some of the need for full lockdowns.2
The markets of developed economies have largely brushed off the threat of the Delta variant so far, with US, Canada, and International equity indices all up significantly year to date. Originally bolstered by their rising share of vaccinations, emerging markets have begun to lag in the face of further supply constraints as some countries begin to roll out booster shots.2
Although the economic recovery continues to progress — albeit unevenly and with a fair dose of uncertainty — it’s important to remember the market’s capacity to surprise us.
And if you have a friend or family member going back to college or university this September who could benefit from gaining a little investing experience, we hope that you’ll use your RBC InvestEase referral code to give them (and yourself!) $25 to start investing with.3