Best to stay out of the markets: How often within the tumult from the past year do you think you’re inclined or advised to this particular effect – way too many complications, heightened risks, it’s all so different, best to stay away prior to the future outlook clears.
Undoubtedly an oil price collapse of epic proportion and artificially low bank rates of interest – inside the U.S. kept at near-zero levels for decades at a time – have their toll. But to categorically stay out of the stock markets and steer clear of investing should be to overlook the late Sir John Templeton’s warning that the words “this time it’s different” would be the most expensive, or dangerous, inside the entire investment lexicon. Even Sir John would probably agree many experts have a great deal different since the near-collapse of the world economic climate inside the years 2007-09 and also the dislocations of that oil-related “tsunami” that began hitting in late-2014. But, not so different that this timeless market cycle and it is ceaseless self-adjusting mechanisms wouldn’t yet again bring inevitable economic and currency markets recovery.
Sir John didn’t have any doubt concerning this because he reminded how bear finance industry is born in the height of euphoria, like the tech-boom of 2000 – 01, and bull markets from the depths of despair, such as the spring of 2009 – and possibly January – February 2016.
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Also there is his steadfast adherence to “time in” as opposed to “timing” the markets being much the greater important, but always – according to a well-planned and executed investment strategy. Add his favourite word “fortitude” and his awesome famous Templeton Mountain Chart works as a timeless reminder of the a disciplined, long-term approach to investing brings.
While precise market timing can not be simple, expecting a Godot mostly never appears can only be self-defeating. The reality is it’s never altogether different. Instead, energy sources Sir John at his word; invest based on a strategically balanced plan. Wounded Canadian investors need to keep this “fortified” knowing that a fire-sale cheap Canada, its dollar and stock markets can seldom have offered such longer-term bargain investment attraction to accommodate individual capital-appreciation or income needs, risk-reward tolerances and ultimate portfolio goals.
This is especially valid for investors managing their own portfolios. Locate an advisor / researcher to guide you, set up your portfolio in accordance with well-established and prudent criteria and think long-term. Don’t wait for an “perfect time” to acquire, it doesn’t exist. Or, as Si John was keen on saying: “The ideal time to speculate is the place there is a money”. Realize that if the market are at its most tumultuous, you may feel anxious and wish to sell. Resist the need, secure in the knowledge that your portfolio will regain its value and many likely then some, if the market swings back – that this always does.
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