Fear and panic can lead to missed investment opportunities, even in the strongest bull markets.
Post-bear-market negativity is a common pitfall for investors, but focusing on practical strategies like diversification and asset allocation is essential.
Don’t rely solely on expert advice or economic predictions – focus on reality and your own investment goals to avoid unnecessary risk.
In March 2009, the subprime mortgage meltdown devastated investors and the financial system. The market had fallen some 58% from its October 2007 peak.
S&P 500 Weekly Chart
The market then rallied for five months in a row from March 2009.
But the narrative for investors and industry professionals was that this was just a technical bounce and that we would go back down, so buy at your own risk!
Market Rally After Hitting Lows
Source: Fundstrat, Bloomberg
What followed was history, one of the best decades with one of the strongest bull markets ever.
This happens all the time. When you add economists, media, and fund managers who ride the post-bear-market negativity, it is easy to fall prey to fear and panic.
I heard another story that one of the possible reasons for the next big crash (which seems imminent) is falling profits.
Falling Profits and Rising Markets
It is a pity that after a bear market like the one in 2022, the markets have had the biggest bounces in history (grey columns)… with falling profits (red columns).
So, the game is always the same: We can be either bearish or bullish, and for each thesis, we can always find some data, some chart, or some expert to confirm our cognitive BIAS.
But then, we have to come back to reality and remember the usual boring stuff: CAP, diversification, strategic and tactical asset allocation, and rebalancing, which I will repeat endlessly.
To try and put some practical spin on these things, I’ve also started a column on a 60/40 2030 horizon in the hope that it will help.
Finally, the famous pros, here is how they have performed over the last ten years against the index:
Hedge Funds Vs. S&P 500
Source: NYU School
They didn’t beat it a single year. So, what are we talking about? If you listen to everybody, you only risk getting hurt.
Disclaimer:This article is for informational purposes only and does not constitute a solicitation, offer, advice, or recommendation to invest as such, nor is it intended to encourage the purchase of any investment. I want to remind you that any type of asset is highly risky and valued from many perspectives. Therefore, any investment decision and the associated risk remain with the investor.
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.
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.
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.
