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Is now the best time to invest in the markets? The answer is never easy

Published

7 months ago

 on

By Rita Li

The last-minute registered retirement savings plan contribution season to boost your tax return is over, but that doesn’t mean investors should forget about how to invest their savings until next February.

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Is now the best time to invest in the markets? That is still one of the most asked questions over the seven years I have been directly working with clients.

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Market timing is such a perennial question because there is no simple rule for it. It is true that if one can precisely invest when the market is strong and stay out or short the market when it is weak, performance should be enhanced. It is also true that there are stretches of time when stock markets have not performed well or been essentially flat.

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There are cycles in the markets just as there are cycles in the economy, and the relationship is not one to one, which is the reason why timing the market is so difficult. There is a disconnect between what people hear on the news regarding geopolitical and economic uncertainties and the more sanguine outlook for strong long-term performance in the markets.

This is the reason in investment management we talk about capital allocation between different asset classes such as stocks, bonds and alternatives like real estate, private debt, private infrastructure, etc.

The benefit of diversification is when times are not too sanguine in one asset class, the other ones can supplement. However, the opposite is also true. In periods when stock markets are very strong, the performance of your investment portfolio can be reduced because of diversification.

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If someone has a long-term investment time horizon and can remain calm when they see a 20 per cent to 30 per cent drawdown in their investments during a market correction, there are very few asset classes that can come close to what the stock markets can deliver over the long run.

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I sit across from very successful individuals and families to have conversations on their investment objectives and financial plans. While people intuitively understand markets tend to recover from a correction and perform well over the long run, many are still very concerned about seeing the value of their investments decline.

There are, however, suitable types of investment for every person, and this is why finding the right capital allocation mix is very important for most individuals and families.

Rita Li is an investment adviser with RBC Dominion Securities.

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Investment

S&P/TSX composite up more than 100 points, U.S. stock markets mixed

Published

1 week ago

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October 16, 2024

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TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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Economy

S&P/TSX up more than 200 points, U.S. markets also higher

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2 weeks ago

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October 11, 2024

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TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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Economy

S&P/TSX composite little changed in late-morning trading, U.S. stock markets down

Published

2 weeks ago

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October 10, 2024

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TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.

The S&P/TSX composite index was up 0.05 of a point at 24,224.95.

In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.

The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.

The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.

The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.

This report by The Canadian Press was first published Oct. 10, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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