I've had a very difficult time in the markets these past few months and the past 2 days have my stomach in knots. The TSE hit a high of 14329 back in early March, and closed today at 12,162 after hitting an intraday low of 11, 894. That's a 15% correction.
Anyone who's an investor knows that sinking feeling. You know what I'm talking about...the feeling of euphoria when your stocks hit highs and do well and you're on top of the world celebrating. You look at the charts, and see that slowly there's a downturn signal but keep telling yourself when it hits a certain level, you'll get out. The summer weather hits and you're off to the cottage, or whatever else you do in the summer and lose track of those support levels you had marked. You hear all the bad news around the world, and then choose to ignore it...to our investing peril.
Well, that's what happened to me. My level was 13000, and before I could blink an eye, I wasn't looking at the "big" picture and failed to take action. It's happened more than once and I'm just about ready to throw in the towel. Is this worth it?? really??
I'm not so sure. Maybe in days gone past, investing had a different "flavour". You saw an undervalued company, you bought and then held. We now have computerized trading, and the big wigs are trading for fractions of pennies!! how the heck can you make anything, when they're churning the stocks for 1/10th of a cent! We had the meltdown in the banks, then real estate along with "Joe's" personal wealth and his job. Now it's entire countries melting down along with their fiat currencies. Political turmoil in the Middle East, a meltdown in the European countries added to the mix creates uncertainty, and as we know the markets despise that..big time.
I'll always trade a few stocks here and there, but our savings in RRSP and for those of you in the U.S. it would be your 401K's just might be better off in guaranteed fixed income. My parents did it that way, averting any downtrends and slowly but surely their nest egg is safe, secure and continually grows. If we had done that from the beginning I'm guessing our entire savings would be double or triple where they are today just by NOT participating in major corrections, like the one we had in the past month...or 2008..or 2000, all three of which I was caught.
These are just my thoughts and I'm venting. Mad at myself for seeing the writing on the wall, seeing the charts, knowing we were in for a correction and then doing nothing about it. That my friend, is human nature as we pat ourselves on the back for a job well done in stock picking. Nothing could be farther from the truth. When there's a bull market on, most stocks will rise in that environment.
Which then brings me to the future. If the average "joe" has just about had it with these markets, and wants out..if baby boomers ready to retire start yanking cash out of mutual funds, then who is left to buy?? The Feds can't support this market (as they've been doing in the past) because of a massive debt load. The funds might even be hit with MORE redemptions which will create more selling. So you tell me, how the heck can we rally from here??
The only thing I see going up in the future is gold, and even that can tank if those in control want to get the POG down.
As I reflect on all of this, the question keeps coming up again, "Is this worth it"? I'm beginning to think it isn't, and ready to take a conservative approach. It doesn't matter how low the yield is, at least it won't go down. It may not keep up with inflation, but I'll be able to sleep at night, take off on a trip or go to the cottage and enjoy life.
I'm sure the mutual fund managers, and financial advisors of the world have been doing just that. Even if the markets go down, they still get paid their "fee".
Maybe it's time for a performance based fee schedule for the industry or this is going to die a slow death.
For those that think there'll always be younger, fresher blood who haven't seen the carnages in the market and hope to entice them into mutual funds, think again. I can only go by what I see with the younger generation including my own children and they have already seen the large drops incurred. In fact, my son calls the markets a "gamble", and he loves poker games but not ready to see the wisdom in placing money in a manipulated market. There's a new generation of investors and they're very smart!
Just my 2 cents FWIW, as
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