It has been a devastating start to 2008 for the Simple Stupid RRSP. It's currently down 8.4% since its inception in August 2007. XSB (Canadian short bond index fund) is my only investment not in the red.
Surprisingly, I don't feel very stressed and feel this is just part of the volatility that any equity investor should come to expect. In fact, given the current risk for a US recession, the market could easily drop further from where we are now. Graph 2 below displays the year-over-year change for the S&P and TSX during the 1990 US recession. As the figure displays, the TSX fell by 20% from October 1989 to October 1990. The S&P fell by approximately 10% over the same time period.
So what are my plans for the Simple Stupid RRSP? Stick to the plan. I'll be making a contribution over the next month and will make another in the summer. These contributions will be spread equally over the four ETFs I currently hold. Pretty boring, eh?
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