Are Averages Misleading?
Rodney D. Falconer
Senior Wealth Advisor, Smith Falconer Financial Group, Wood Gundy, CIBC Private Wealth
As Investment Advisors, we examine portfolio performance on a daily basis. In our May 2019 eUpdate, we highlighted the differences between "book value" and "invested capital" when reviewing a portfolio's performance. This topic continues to be top of mind.
In our latest quarterly Perspective Newsletter, we address the need to prepare for the inevitable down periods in every market cycle. Being prepared may help to minimize the risk of making a hasty, emotional decision. Looking at long-term averages can provide a good reminder of why it is important to remain invested.
On page 4,"Investing Stats and Figures: Why Averages Can Be Misleading" aims to remind us to look beyond the isolated averages and remember their purpose in helping to explain the big picture.