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On Our Minds: I'm Not Sure What My Next Investing Move Is — And That's OK

Written by Nicholas Mizera | Published on July 25, 2022

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American indexes tumbled into bear-market territory earlier this year, some shedding more than 20 per cent of their value. Meanwhile, rising inflation has been putting the squeeze on my budget, and the Bank of Canada just recently raised its key interest rate by 100 basis points – its largest single increase since 1998.

In the face of all that, and the fact that I'm a relatively new self-directed investor, I've been a little (OK, a lot!) unsure about my next buy and sell decisions. That uncertainty started to make me feel like I wasn't doing enough to manage my investments. It turns out, I've been doing more than I thought. Here's what I mean.

When I first started investing, I read that “doing nothing" can, at times, be an investor's best course of action. The argument made sense: unexpected situations can lead us to make all sorts of snap decisions with the potential to jeopardize our investing plans. (It's called action bias, and it's real!) So, with a mind to keep my cool in the face of uncertainty, I determined that I would avoid the temptation to preen my portfolio and wait until volatility eases. But what was I to do in the meantime?

I recently listened to an interview with Stu Kedwell, Senior Vice President of North American Equities at RBC Global Asset Management. In it, Kedwell tells my colleagues: "Successful investors spend a lot of time watching. And there's a big difference between monitoring and doing nothing – monitoring is doing something."

He's right. If there's anything the past few months have taught me, it's that there's more to being an active direct investor than buying and selling. Much “investing" can take place when we're researching, monitoring and finding new ideas.

If you've slowed down your pace of investing, too, or simply want some ideas for being an engaged investor during this bear market – and possibly an upcoming recession – here are some ways I've been staying on top of my investing plan.

Taking a closer look at my holdings

I thought that my hiatus would keep me offline, but I haven't stopped logging into my dashboard and checking my portfolio. Rather than skimming, I've been taking a long, hard look at my holdings – something I hadn't done in a while. I click through to each of the securities' detailed quote pages and dive in. Though many of my holdings are in the red (ugh!), a closer look reveals that many of the companies I hold appear to have solid plans for mitigating the uncertainty ahead. It's helped me feel more confident that my investment plan seems to be working as intended.

Being an engaged shareholder

With many companies scrutinizing and reorganizing their top brass, I had the opportunity to try something new recently: vote as a shareholder. A letter arrived in the mail with details and a QR code to a voting website, immediately prompting me to Google various directors and their plans. The experience reminded me that being a dutiful shareholder is another path to being engaged as an investor. Some other ways include participating in stock buybacks and catching earnings calls.

Learning more

When I was in the media industry, I spent time every morning catching up on the news – journalists call it “reading in." I've found this a handy habit to hold onto as an investor. Though I already tend to follow many business and investing news sources, I've been branching out. I've found some investing sources that challenge my viewpoints, have subscribed to new newsletters and even joined a Discord server devoted to investing.

Planning my next move

I don't expect to feel this paralyzed indefinitely (at least I hope not!), so I'm already planning what I might do next. While news of market downturns and recessions is disheartening, I've also realized market volatility can present opportunities for prepared investors. Research tends to show that investors who've stuck to their investing plan through turbulent times have historically been rewarded. So, right now I'm building up some dry powder to make a move when I'm ready.

RBC Direct Investing Inc., RBC Global Asset Management Inc. and Royal Bank of Canada are separate corporate entities which are affiliated. RBC Direct Investing Inc. is a wholly owned subsidiary of Royal Bank of Canada and is a Member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund. Royal Bank of Canada and certain of its issuers are related to RBC Direct Investing Inc. RBC Direct Investing Inc. does not provide investment advice or recommendations regarding the purchase or sale of any securities. Investors are responsible for their own investment decisions. RBC Direct Investing is a business name used by RBC Direct Investing Inc. ® / ™ Trademark(s) of Royal Bank of Canada. RBC and Royal Bank are registered trademarks of Royal Bank of Canada. Used under licence. © Royal Bank of Canada 2022.

Any information, opinions or views provided in this document, including hyperlinks to the RBC Direct Investing Inc. website or the websites of its affiliates or third parties, are for your general information only, and are not intended to provide legal, investment, financial, accounting, tax or other professional advice. While information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by RBC Direct Investing Inc. or its affiliates. You should consult with your advisor before taking any action based upon the information contained in this document.
Furthermore, the products, services and securities referred to in this publication are only available in Canada and other jurisdictions where they may be legally offered for sale. If you are not currently a resident of Canada, you should not access the information available on the RBC Direct Investing Inc. website.

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