Investing can really test your emotions.
Markets can go up and down at a moment’s notice and make you feel like nothing is going according to plan. This is especially true when you feel you have no control over anything around you, like the price of gas, the cost of groceries, or increased taxes on alcohol. Choppy markets only amplify those emotions.
We all go through the feelings. Everyone of us. How we handle those feelings is the difference.
Interestingly enough, index investors have usually made peace with the markets. They accept that they will earn market-average returns (which usually beat most investors), and that markets are generally efficient over the long term.
As you can see from the chart, volatility is constant, but over time it smooths itself out. You must accept volatility for returns above, say, 4%.
Keeping It All Grounded
As historical data shows, markets trend upward over long periods of time.
What’s in your control is how much money you deploy, what you invest in, and how you plan your transition into retirement.
Depending on where you are in your investing journey, you don’t have to manage all of these at once—but you should be aware of them. Portfolio strategy also plays a part.
A Few Thoughts
Dollar-cost averaging works. Don’t try to time the bottom or the top—just keep adding. It relies on your conviction in what you own. Index investors rarely question that conviction, but investors in individual stocks have to.
DRIP, or Dividend Reinvestment Plan, works. It’s another form of dollar-cost averaging. I tried timing it—deciding where to reinvest dividends once the amounts became meaningful—and I wasn’t any better than simply letting it run. I now DRIP and don’t try to outsmart the market.
Patience pays. Markets recover. Even though there was a lost decade 25 years ago, markets recovered. Even more so if you diversify across Canada and the U.S. to benefit from different economic cycles.
Stay invested. If you lose trust in your individual stocks, switch to an index—but stay invested. You can’t predict highs and lows. History has shown, repeatedly, that staying invested wins.
Where to invest? It’s chaotic across multiple fronts. Tech is facing AI disruption. Energy is doing well, but it’s still driven by oil prices. I gave up on REITs and utilities long ago. While I hold the Mag 7, I also balance that with defensive names like Costco, AbbVie, and Dollarama. Walmart is another one worth looking into. I also like financials—the world runs on finance. You can lean into the Canadian oligopoly or some of the dominant U.S. banks.
“Cash is king” is often an excuse. Being in cash means falling behind. I have a lot in cash right now ahead of the asset split from the divorce, and all I see is dead money—but I can’t take risk in the short term. That’s different. If you’re investing for the long term, sitting in cash means missing out.
The Next Move Has Started
Wall Street just bet billions on a small collection of stocks. Our analysts tracked the rotation and identified 10 companies seeing heavy accumulation from institutional money right now.
The tickers, the trends, and the reasoning are all in The 10 Best Stocks to Own in 2026 report.
Bringing It Together
Volatility isn’t something to eliminate—it’s something to understand and accept.
This is where having a framework matters.
If you think in terms of roles within your portfolio — your foundation, your stability, your engine, your compounders — you stop reacting to short-term noise and start focusing on what each part of your portfolio is supposed to do.
Some parts will feel volatile. Some will feel boring. That’s the point.
The mistake most investors make is trying to make everything stable at once, or chasing returns when things feel too quiet. Both usually lead to poor decisions.
Volatility is the price of admission for long-term returns. The goal isn’t to avoid it—it’s to build a portfolio that lets you live with it.
And once you accept that, investing becomes a lot simpler.