Skip Ribbon Commands
Skip to main content
About us
Who we are
Who we are Plan history
Plan history Governance
Governance Management
Management News
News Living with COVID-19
Living with COVID-19 Contact us
Contact us
About us Members Members Employers
Remit contributions
Remit contributions Employer procedures
Employer procedures Bulletins and updates
Bulletins and updates Employer FAQ
Employer FAQ
Employers Investing
Investment funds
Investment funds Making investment decisions
Making investment decisions Changing your investments
Changing your investments Historical unit prices
Historical unit prices Rates of return
Rates of return Pensions Fund
Pensions Fund Investor stories
Investor stories
Investing Forms and resources Forms and resources

​Looking ahead: Making investment decisions in uncertain times

Throughout 2018, many members no doubt noticed the increased volatility that was occurring in the stock markets and the daily fluctuations in unit values of our Balanced and Equity Funds at CSS. What should we make of this?

First of all, it’s important to remember that stock markets go up and down. 2017 was a good year for CSS members invested in the Plan’s Balanced and Equity Funds. However, 2018 showed us that markets can be unpredictable and that they can drop significantly in short periods of time. So, it’s very important for investors (i.e., CSS members) to expect some bumps in the road so that they are not lured into making short-term, knee-jerk investment decisions when their investment horizon is long.

What is currently going on to create the volatility in stock prices? 

The current volatility  in 2018 was likely caused by a host of things:
  • The current bull market is quite mature so investors were trading (i.e., selling) more in anticipation of an end to the bull
  • The trade war rhetoric that was occurring amongst some of the world’s largest governments and economies was causing anxiety amongst investors
  • Several central banks were raising interest rates that have been at historical lows since the financial crisis in 2008
  • The risk of global conflict seemed to be rising amongst some of the world’s largest militaries
  • Any number of other global and geopolitical events that raised investor anxiety and caused them to trade more


However, trying to determine the source of the volatility is not the question we should be asking ourselves as investors. Volatility in stock markets is normal so the more important question to ask is whether our portfolios (our individual CSS retirement investments) are properly positioned for our own personal circumstance and long-term objectives.  


For example, if a member was planning to retire within the next couple of years or so, and they are planning to purchase a traditional monthly pension with their accumulated wealth held at CSS, it may be appropriate to ensure that their account holdings at CSS are transitioned to more conservative investment funds (for example, perhaps more exposure to bonds and money markets rather than equities) in the near term to reduce the risk of a drop in stock markets significantly reducing the value of the member’s holdings just prior to retirement.


On the other hand, members with a long investment horizon will need to take on investment risk to generate appropriate long-term rates of return on their investments (including in retirement if not purchasing a traditional monthly pension with their holdings). These members will need to drown out the short-term noise and recognize that any volatility happening in the short-term is just part of the normal investment cycle. Sticking to their long-term investment strategy will best serve these members in achieving an appropriate nest egg to support their retirement spending needs. 


All that said, we recognize that it is not easy watching your portfolio value fluctuate from one day to the next due to volatility in the stock market. Emotions can be tough to overcome, but they can lead us into making short-term investment decisions that may be harmful in the long-term. 


Members are encouraged to review the investment decision-making information on our websiteAnd, one of the benefits of being a member of CSS is access to our Pension Plan Consultants should you have any questions about your CSS investments or your retirement plans – feel free to contact us.

First published on June 13, 2018 and revised on January 16, 2019

You may also be interested in: The risks of market timing