Niagara Region Money Coaches
200 -36 Hiscott St L2R 1C8 Saint Catharines, ON, Canada

Should We Be Buying Stocks When Stocks Seem Cheap? Here’s a question I’m getting from those with long term outlooks during this crisis: Is now a good time to buy stocks? As of noon on March 25th, Canadian stocks were down 25% over the past month. If that doesn’t scream ‘buy’ I’m not sure what does. But we don’t live in a vacuum.... it’s really hard to say ‘buy’ right now. Every time there is a huge correction or bear (meaning a down) market the news is awful. Remember 2008? That’s why the markets are down. What I’m saying now, is what I always say. We don’t know what’s going to happen next. In fact you should run away from anyone who says they do know what’s going to happen next. Even some of the top strategists withdrew their earnings targets for the year in the last couple of days (so the most educated and informed are admitting ‘they don’t know’ that’s refreshingly rare). Honestly, the speed of the bounce-back may take weeks, months, or even years. On historic terms a bear market is generally a good time to buy, but we just don’t know how low a bear market can go. And if we think we’re buying low, and markets drop another 20% we’ll be disappointed. So, what I recommend for investors with long term timelines is this: Dollar cost average into this market. If you usually buy $200/month into your RRSP keep doing that. If you’ve got $10,000 to invest, consider buying $2,000/month each month over the next 5 months. This is a bear market and it is likely a buying opportunity just don’t put all your eggs into one basket, (or buy it all on one day). This will spread your buying risk out. And remember selling is the worst thing you can do in a bear market. This is why seniors should always have significant holdings in cash and bonds. Locking in losses means you’ve actually realized your losses. And then you’ll miss the bounce. This is why investing should only be done with money that you don’t need for at least 5 years.

What to do in this Crisis? There’s no doubt we are in uncharted waters. Everyone is trying to navigate through this crisis in their own way, and I offer 5 tips to help you stay grounded during this time. #1: Keep yourself and your family safe. At this time self-isolation is the best way we can protect our neighbours, friends and communities from the spread of Covid-19. Do your part and we will stop the community spread!... #2: Minimize your exposure to the media. Too much time spent on the statistics, charts and projections isn’t good for your soul. Educating yourself is certainly a good thing and keeping apprised of what is happening is important but having news on 24/7 isn’t recommended either. #3: Look after your mental health. Create routines in your day. Pop outside to get fresh air. Eat well. Stay connected with family and friends. Use social media or make a phone call to support and be with those who live alone or aren’t permitted visitors. #4: Don’t sell your investments in a down (bear) market. Your retirement funds are taking a hit everyone’s are. But now is not the time to lock in those losses. The Canadian stock market has dropped 32% in the past month, and it might go lower still or it might start to bounce. We don’t know. What we do know is that markets usually come roaring back from a bear market and we have no idea when. It will be bumpy, but staying invested will mean you are still invested when the bounce comes. Sitting on cash will not be rewarded for those with long investment timelines. #5: Maintain a positive attitude. We may feel like a lot of things are outside our control right now, but we can control what we choose to say and do. Thank our front-line health care workers. Find something to smile about there are a lot of inspiring acts of kindness and videos circulating. Let them inspire us. Dozens of new vaccines are being tested today. The Toronto Raptors are World Champions for one more year. The warm weather is coming. Stay well everyone, Trevor.

A recent interview with AdvisorSavvy: https://advisorsavvy.com/trevor-van-nest-financial-coach/