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moneysense.ca, 1/03/07
Thoughts on the Market Correction
Equity investors discovered the meaning of risk all over again as markets around the world corrected sharply earlier this week. There is much speculation in the media if this is the beginning of a correction or the rumblings of a bear market or a mere one-day blip in a bull market that is almost four years old now.
I don’t put much faith in predictions of any kind and while the losses are not pretty, it is important to keep in mind that markets do not go up forever and corrections such as the one this week are inevitable. Also, market corrections do have a silver lining for the long-term investor: they almost always are a good time to put more money to work.
moneysense.ca, 1/03/07
As long as you’re in investor, lower prices are good, you can buy more for less. Of course, when
you want to SELL, then you want your bull to be
running, LoL. The only way to look at market
declines is, “Hey, the market is a better deal
now than it was last week (or month, or year,
whatever)
I’ve had a strong belief that the market was overvalued for a very long time. So, although the equities that I do have are getting slaughtered right now, I’m also about 40% in cash and am waiting to deploy that money. Trying to figure out when we hit bottom is pretty tough, though.
This couldn’t have come at a worse time for me. The day before the correction I had filled out a form to withdraw RRSP funds under the Home Buyer Plan. I guess the loss is my own fault because I had been procrastinating moving from my Canadian and world equity funds over to something like a money market preparing for the home purchase . . .
“That’ll lern ya!”