2022 was a headline-making year for financial markets and economies around the world. Interest rates increased to heights not seen since the 80’s here in Canada and prime rates were raised a staggering seven times over the year. Volatility is back in a big way, with fears surrounding surging inflation and repeated interest rate hikes that lead to steep market declines for 2022. All sorts of investments have been affected, including historically safer investments like bonds. The broader bond market has seen it’s worst year ever. Big name brands in the world of tech have also taken on staggering losses. Meta, owner of Facebook and Instagram had a disastrous year, suffering a 75% drop in value. There are many reasons why disruptive investments like cryptocurrencies and tech companies, and even more traditional investments like real estate, had such a bad year. Inflation, the general increase in the price of everything from gas to groceries to a night out at the movies. Restricted in their homes for almost 2 whole years, Canadians, Americans and just about everyone else came into 2022 ready to spend and return life to normal. All the money we pumped into the economy caused prices to surge. Governments around the world responded by increasing interest rates, hoping the rise in borrowing costs would make people hold off on more spending and start saving instead. And a lot of people did just that. But increases in interest rates made it difficult for investors to predict how much a company might be valued in the future. This led many to ditch risky tech stocks for more stable alternatives. Interest rate hikes also motivated or forced millions of everyday people to sell risky investments, like cryptocurrencies and tech stocks, to cover debts, like mortgages, which have gotten more expensive in the past year. Does all this matter for your long-term investment goals? Most likely not if you stay invested in a well-diversified portfolio that will help you stay balanced and even grow while markets undergo big swings. One negative effect of these downturns is that every time in January and February after it occurs, many investors feel discouraged and decide against making an additional RRSP deposit. They think it’s better to wait for more certain times and a market in an upswing. The opposite is the case. There is no better time to put new money in the market than after a downturn we just experienced, as long as your investment horizon is longer than one year. Tomorrow is the last day to make an RRSP deposit for 2022. Many will not do so for good reasons like cashflow issues caused by high inflation or changes in income. But if your reason is last years performance and the current state of the financial markets, remind yourself that every downturn in the past has presented opportunities, and this time will most likely not be any different.