It may be bad memories from last October coming to the surface, but I’ve been sensing more nervousness about the stock market in recent weeks.

You’ll recall the markets went through a bad patch around this time in 2018, with the S&P/TSX Composite down 6.3% in October and another 5.4% in December. South of the border, the S&P 500 plunged 6.8% in October and 9% in December.

It was painful, but the market snapped back very quickly. The TSX and S&P 500 shot up over 8% in January, and by April, both indexes were making new highs.

If you were out of the market you would have missed all those returns. In fact, that’s just what happened to many investors. A Globe and Mail analysis of Statistics Canada data shows that Canadian investors were dumping U.S. stocks even as the market rebounded powerfully.

Investors reacted to last year’s correction by selling $8.5 billion in U.S. equities in January. The data on U.S. stock sales is for both retail and institutional investors, indicating that even the professionals were caught trying to time the market. As a counter-point, our disciplined rebalancing meant that we were buying equity while others were selling.

Now, let’s consider this year. The China-U.S. trade war, Brexit and talk of an impending recession have been making headlines for months. These issues aren’t new and the stock markets are keenly aware of their potential economic impacts. Yet, it’s shaping up to be a stellar year on North American markets with the TSX Composite up 14.6% year to date, and the S&P 500 up 21.1%.

That supports what we already know—any bad news that investors know about has already been priced into the market. The reality is it takes something new and unexpected to substantially move prices, and that something could just as easily be an improvement over the current state of affairs, in which case markets would react positively.

While there are always things to worry about, we just don’t know what’s going to happen and neither do all the market forecasters on TV and in the newspaper.

Still, it’s important to be ready. That’s why at PWL, every client has a personal investment policy statement (IPS) that establishes how much risk they’re willing to take by setting target asset allocations.

An IPS also forces us to rebalance your portfolio periodically. When stock markets fall substantially, the equity portion of your portfolio falls below your targeted allocation. To rebalance, we purchase stocks—at the lower prices—to restore the target portfolio composition, just like we did last January. Our research clearly shows this is a profitable practice.

Your best strategy, in good times and bad, is to hold a highly diversified portfolio of low-cost investments and stick with it for the long term. As a portfolio manager, an important part of my job is to keep you on track with the plan we’ve developed. Together, we can ride through turbulence and emerge stronger on the other side.