A Real-Life Stress Test

The year 2016 started out with a bang, to say the least.

The past year marked a transition in financial markets as the U.S. hiked overnight interest rates for the first time in nine years, releasing volatility and, with it, the rally in equity markets we’ve enjoyed so much over the last five years began to fizzle. It can be difficult to adjust to the end of a good run, but is adjustment necessary? What does it all mean?

Times of heightened volatility often mean a few things:

1. Angst, fear and capitulation with the media and casual investor, which leads to further volatility;

2. The opportunity for investment managers to shine as the new-found volatility opens up new prospects; and

3. Uncertain markets provide the chance to stress test plan structure in a real-life situation.

To read more and understand what this all means, check out our first installment on volatility on Benefits Canada.