Should I sell my investments or stay invested?
Clement Chung
It is the question almost everyone asks after a quarter like this one, usually late in the evening, with the statement still open on the table. The honest answer is almost never a simple yes or no, but it can be reached, quite quickly, with three questions that have nothing to do with predicting the market. For most people, a difficult quarter is not, by itself, a reason to sell. Markets moving is a reason to pay attention. Your life changing is a reason to revisit a plan. Confusing the first for the second is how a temporary drop in prices becomes a permanent loss, because selling after a fall locks the fall in, and getting back in requires a second good decision that almost nobody times well. Q3 2026 was uncomfortable, particularly for anyone holding bonds. Discomfort, however, is not the same as a broken plan. Here is how to tell the difference, using the same three questions I work through with clients after any hard quarter. Question one: has my goal changed, or just the market? Every portfolio worth having was built for something specific. Retiring at a certain age, on a certain income. Funding a child's education. Drawing a salary and dividends from a corporation in the most tax-effective order. Leaving something behind for family. Each of those goals came with a date, and the investments were chosen to fit the goal and the date together. So the first question is not about the market at all. Has the goal moved? Has the date moved? If both are exactly where they were three months ago, that is a genuinely strong reason to leave the structure of the plan alone, even if the last quarter felt awful. What that really means is the market is testing the plan, not the other way around. The plan itself has not changed, and being tested by markets from time to time is kind of what a plan is built to handle. Nothing about the job the money has to do has changed, so nothing about how it is set up needs to change either. If something real has changed, and life does this regularly, then a review is not only reasonable, it is overdue. A lost job. A health change. A decision, made for good reasons, to retire two years earlier than planned. A business being sold, or a parent needing support. In those cases, the portfolio should absolutely be revisited. But notice what is driving the change there. It is your life, not the stock market. Selling because the plan no longer fits your life is good planning. Selling only because prices fell, when the plan still fits, is reacting, not planning. Question two: can I honestly stay with this through another quarter like that one? This question has no wrong answer, and it matters more than most people realise. The right amount of risk in a portfolio is not the amount that produces the best result in a spreadsheet. It is the amount its owner can actually live with through the bad stretches, without abandoning the plan at the worst moment, because a plan abandoned at the bottom delivers none of the results the spreadsheet promised. Look at what the same year felt like from different positions. Through the first nine months of 2026, portfolios weighted toward stocks did well, lifted by strong company profits. Portfolios weighted toward bonds had a much rougher ride, because bonds fell as interest rates rose. Neither approach failed. They are built for different people, with different dates and different temperaments, and they felt different because they are different. If this quarter kept you up at night, treat that as information, not as a character flaw. It may mean your mix carries more risk than you can comfortably hold, in which case adjusting it, calmly and on purpose, is a legitimate planning decision, very different from selling in a panic. It may also mean the mix is right and what was missing was an explanation of what a quarter like this would look like before it happened. Those two situations need opposite responses, and they are worth telling apart. A portfolio you cannot stay with will not get the chance to do its job, no matter how well it is built. Question three: is the money I need soon kept separate from the money I do not? If the first two questions are about thinking clearly, this one is about something more practical, and in practice it is where hard quarters actually hurt people. Money you will need in the next year or two should not be riding the market's ups and downs. If it is, a falling quarter creates a trap. Let's say the stock market drops 30% in a bad stretch and your portfolio is down 10% or so as a result. If the money for next year's purchase is sitting in that portfolio, you are now choosing between delaying the purchase and selling at the bottom to fund it. Neither is a choice anyone would make on purpose, right? You need the money, the investment is down, and you are forced to sell at exactly the wrong time. The loss stops being temporary because your calendar made it permanent. Money that is properly separated works completely differently. Your near-term needs sit in cash and short-term holdings, where Q3 barely registered, short-term Canadian bonds lost less than 1% in the quarter, against more than 6% for long-term ones. Your long-term money stays invested, untouched, with time to recover on its own schedule, which markets have historically given it. No forced selling. No decisions made under pressure. Just a plan handling a bad quarter the way it was set up to. This separation, matching each pool of money to when it will actually be needed, does more to protect real households from market drops than any forecast, fund change, or market call ever made. It is also, in my experience, the piece most often missing when a quarter like this one causes real damage. The damage is rarely the market's fault. It is a timing mismatch, discovered at the worst possible moment. What is worth watching in the months ahead Watching the market is not the same as acting on it. Knowing what is coming, and knowing in advance what would actually matter to your plan, is how headlines lose their power to provoke a reaction. Five things are worth keeping an eye on into the end of 2026. Energy and inflation come first, for the reason covered in the rates post: expensive diesel moves the cost of nearly everything, and if higher fuel costs spread into wages and services, central banks may need to do more than they currently plan. Second, the US Federal Reserve's December meeting, where one more rate increase is expected and may mark the end of this round of raising. Third, the Bank of Canada, which held at 2.25% through Q3 but warned that risks had risen, whether it moves will say a great deal about how it reads Canada's soft job market against inflation. Fourth, whether company profits broaden beyond a handful of sectors; earnings strength concentrated in a few areas, particularly around artificial intelligence, carried this year, and a broader base would be a healthier foundation. Fifth, the US midterm elections in November, which will shape American policy on trade, spending, and energy for the next two years. Elections tend to unsettle markets briefly, then give them a clearer picture to price in. That is a real list, with real stakes. And for most long-term plans, the honest assessment is that none of those five, on their own, changes what the plan should be. None of the five changes the plan itself. The goal, the date, and the way the portfolio is built to get there stay the same, whichever way those five break. A simple test, before you change anything Before selling, switching, or moving to cash, try to finish one sentence, in writing: "Something has changed in my life or my plans, and it is..." If you can finish it, easily and specifically, you have found the real issue. That deserves a proper conversation about the plan, not a trade made out of frustration. If you cannot finish it, then what has actually changed is only the market. Markets changing is normal. It is the price investors have always paid for the long-term returns markets have paid the people who stayed invested. Q3 2026 gave investors a quarter that felt worse than it was: profits strong, prices reasonable, bonds down but paying more than they have in years, rates rising for one identifiable reason that may well fade. Most households that can answer those three questions will leave their plans exactly where they are. Not out of stubbornness. They will have worked through it and found there is nothing in their own situation that needs fixing, even if the quarter itself was unpleasant. This post is general information and education only, not personal financial advice. Past performance does not guarantee future results.
It is the question almost everyone asks after a quarter like this one, usually late in the evening, with the statement still open on the table. The honest answer is almost never a simple yes or no, but it can be reached, quite quickly, with three questions that have nothing to do with predicting the market. For most people, a difficult quarter is not, by itself, a reason to sell. Markets moving is a reason to pay attention. Your life changing is a reason to revisit a plan. Confusing the first for the second is how a temporary drop in prices becomes a permanent loss, because selling after a fall locks the fall in, and getting back in requires a second good decision that almost nobody times well. Q3 2026 was uncomfortable, particularly for anyone holding bonds. Discomfort, however, is not the same as a broken plan. Here is how to tell the difference, using the same three questions I work through with clients after any hard quarter. Question one: has my goal changed, or just the market? Every portfolio worth having was built for something specific. Retiring at a certain age, on a certain income. Funding a child's education. Drawing a salary and dividends from a corporation in the most tax-effective order. Leaving something behind for family. Each of those goals came with a date, and the investments were chosen to fit the goal and the date together. So the first question is not about the market at all. Has the goal moved? Has the date moved? If both are exactly where they were three months ago, that is a genuinely strong reason to leave the structure of the plan alone, even if the last quarter felt awful. What that really means is the market is testing the plan, not the other way around. The plan itself has not changed, and being tested by markets from time to time is kind of what a plan is built to handle. Nothing about the job the money has to do has changed, so nothing about how it is set up needs to change either. If something real has changed, and life does this regularly, then a review is not only reasonable, it is overdue. A lost job. A health change. A decision, made for good reasons, to retire two years earlier than planned. A business being sold, or a parent needing support. In those cases, the portfolio should absolutely be revisited. But notice what is driving the change there. It is your life, not the stock market. Selling because the plan no longer fits your life is good planning. Selling only because prices fell, when the plan still fits, is reacting, not planning. Question two: can I honestly stay with this through another quarter like that one? This question has no wrong answer, and it matters more than most people realise. The right amount of risk in a portfolio is not the amount that produces the best result in a spreadsheet. It is the amount its owner can actually live with through the bad stretches, without abandoning the plan at the worst moment, because a plan abandoned at the bottom delivers none of the results the spreadsheet promised. Look at what the same year felt like from different positions. Through the first nine months of 2026, portfolios weighted toward stocks did well, lifted by strong company profits. Portfolios weighted toward bonds had a much rougher ride, because bonds fell as interest rates rose. Neither approach failed. They are built for different people, with different dates and different temperaments, and they felt different because they are different. If this quarter kept you up at night, treat that as information, not as a character flaw. It may mean your mix carries more risk than you can comfortably hold, in which case adjusting it, calmly and on purpose, is a legitimate planning decision, very different from selling in a panic. It may also mean the mix is right and what was missing was an explanation of what a quarter like this would look like before it happened. Those two situations need opposite responses, and they are worth telling apart. A portfolio you cannot stay with will not get the chance to do its job, no matter how well it is built. Question three: is the money I need soon kept separate from the money I do not? If the first two questions are about thinking clearly, this one is about something more practical, and in practice it is where hard quarters actually hurt people. Money you will need in the next year or two should not be riding the market's ups and downs. If it is, a falling quarter creates a trap. Let's say the stock market drops 30% in a bad stretch and your portfolio is down 10% or so as a result. If the money for next year's purchase is sitting in that portfolio, you are now choosing between delaying the purchase and selling at the bottom to fund it. Neither is a choice anyone would make on purpose, right? You need the money, the investment is down, and you are forced to sell at exactly the wrong time. The loss stops being temporary because your calendar made it permanent. Money that is properly separated works completely differently. Your near-term needs sit in cash and short-term holdings, where Q3 barely registered, short-term Canadian bonds lost less than 1% in the quarter, against more than 6% for long-term ones. Your long-term money stays invested, untouched, with time to recover on its own schedule, which markets have historically given it. No forced selling. No decisions made under pressure. Just a plan handling a bad quarter the way it was set up to. This separation, matching each pool of money to when it will actually be needed, does more to protect real households from market drops than any forecast, fund change, or market call ever made. It is also, in my experience, the piece most often missing when a quarter like this one causes real damage. The damage is rarely the market's fault. It is a timing mismatch, discovered at the worst possible moment. What is worth watching in the months ahead Watching the market is not the same as acting on it. Knowing what is coming, and knowing in advance what would actually matter to your plan, is how headlines lose their power to provoke a reaction. Five things are worth keeping an eye on into the end of 2026. Energy and inflation come first, for the reason covered in the rates post: expensive diesel moves the cost of nearly everything, and if higher fuel costs spread into wages and services, central banks may need to do more than they currently plan. Second, the US Federal Reserve's December meeting, where one more rate increase is expected and may mark the end of this round of raising. Third, the Bank of Canada, which held at 2.25% through Q3 but warned that risks had risen, whether it moves will say a great deal about how it reads Canada's soft job market against inflation. Fourth, whether company profits broaden beyond a handful of sectors; earnings strength concentrated in a few areas, particularly around artificial intelligence, carried this year, and a broader base would be a healthier foundation. Fifth, the US midterm elections in November, which will shape American policy on trade, spending, and energy for the next two years. Elections tend to unsettle markets briefly, then give them a clearer picture to price in. That is a real list, with real stakes. And for most long-term plans, the honest assessment is that none of those five, on their own, changes what the plan should be. None of the five changes the plan itself. The goal, the date, and the way the portfolio is built to get there stay the same, whichever way those five break. A simple test, before you change anything Before selling, switching, or moving to cash, try to finish one sentence, in writing: "Something has changed in my life or my plans, and it is..." If you can finish it, easily and specifically, you have found the real issue. That deserves a proper conversation about the plan, not a trade made out of frustration. If you cannot finish it, then what has actually changed is only the market. Markets changing is normal. It is the price investors have always paid for the long-term returns markets have paid the people who stayed invested. Q3 2026 gave investors a quarter that felt worse than it was: profits strong, prices reasonable, bonds down but paying more than they have in years, rates rising for one identifiable reason that may well fade. Most households that can answer those three questions will leave their plans exactly where they are. Not out of stubbornness. They will have worked through it and found there is nothing in their own situation that needs fixing, even if the quarter itself was unpleasant. This post is general information and education only, not personal financial advice. Past performance does not guarantee future results.