We have seen plenty of examples: 2000 to 2002 were bad years after a bull run in the late 1990’s. The markets eventually recovered and bull markets pushed it to new highs, before it dropped by 50% in 2008 and took about 10 years before the TSX came back to 2008 highs. Now the bulls are on a run again!
What if many market gurus are right and we are headed to a world recession? What happens to your investment opportunity then?
Fund managers won’t tell when you they expect their funds to drop. How long would they hold on to their jobs if they did that? Many advisers get their information from the spins presented by fund companies and managers, so they may not tell you either.
Politicians won’t tell you either, remember the prime minister and his finance minister in early 2008 telling us that even though the US banks were in trouble our Canadian banks were in good shape? Of course they did, it was a way of preventing people from getting scared and starting a run on our banks. But Canadian stock markets dropped by 50%.
Depending on your age there are several ways you can avoid these losses and actually make money on such events.
Market Timing; changing investments in reaction to monthly or weekly news, is a way most people get wrong. So advisers tend to tell you what their fund managers advise, stay invested.
Systemic Market Failures is another thing, conditions can actually give you a good indication of these major market recessions, and there are preventative measures you can take.
Again which measure is best suited for you depends on your individual situation and age.
Lord Alfred Daffodils sold for $6,000 a bulb in Holland several hundred years ago. The values were created because the wealthy royalty would pay for this unique new variety of flowers. Growers began breeding them and soon the price dropped, so that today their value is only a dollar or so. Markets are cyclical.
Contact us for an assessment of your situation, we will help.
Gordon@SmartChoiceLife.com www.SmartChoiceLife.com phone 506 454-3346 or 1-800-471-0411
Gordon, the is a certified Financial Planner with over thirty years experience. He has been helping families and small businesses since 1991. He is also a published financial author and wrote a weekly financial advice column in the Daily Gleaner newspaper for five years.