Far better to avoid the markets: The frequency of which within the tumult of the past year have you been inclined or advised to the effect – too many complications, heightened risks, it’s all so different, better to stay away prior to the future outlook clears.
Undoubtedly an oil price collapse of epic proportion and artificially low bank rates – in the U.S. kept at near-zero levels for decades at a time – have their toll. But to categorically avoid the stock markets and steer clear of investing would be to disregard the late Sir John Templeton’s warning that this words “this time it’s different” will be the most high-priced, or dangerous, from the entire investment lexicon. Even Sir John may possibly agree it has been a great deal different since near-collapse of the world overall economy in the years 2007-09 and the dislocations of the oil-related “tsunami” that began hitting in late-2014. But, not so different how the timeless market cycle and its ceaseless self-adjusting mechanisms wouldn’t once more bring inevitable economic and currency markets recovery.
Sir John didn’t have any doubt relating to this as he reminded how bear investing arenas are born at the height of euphoria, much like the tech-boom of 2000 – 01, and bull markets within the depths of despair, much like the spring of 2009 – and possibly January – February 2016.
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As well there were his steadfast adherence to “time in” rather than “timing” the markets being much the harder important, but always – based on a well-planned and executed investment strategy. Add his favourite word “fortitude” and the famous Templeton Mountain Chart works as a timeless reminder of the items an organized, long-term method of investing can bring.
While precise market timing can never be simple, looking forward to a Godot mostly never appears is only able to be self-defeating. The truth is it is never altogether different. Instead, wise investment to consider Sir John at his word; invest as outlined by a strategically balanced plan. Wounded Canadian investors should keep doing so “fortified” knowing a fire-sale cheap Canada, its dollar and stock markets can seldom have offered such longer-term bargain investment attraction to allow for individual capital-appreciation or income needs, risk-reward tolerances and supreme portfolio goals.
This is especially valid for investors managing their own portfolios. Obtain an advisor / researcher to assist you, build your portfolio in accordance with well-established and prudent criteria and think long-term. Don’t wait for “perfect time” to purchase, it won’t exist. Or, as Si John was fond of saying: “The ideal time to get is when you will find the money”. Understand that at times when the market reaches its most tumultuous, you will feel anxious and would like to sell. Resist the desire, secure knowing your portfolio will regain its value and a lot likely then some, in the event the market swings back – so it always does.
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