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I wanted to comment
again on what has been
occurring in the markets
of late, as I know all
of you have been
bombarded by "expert
opinions" from the
media, fund companies
and alike. I offer my
opinion which is far
from being "expert" but
hopefully very
practical.
Like some of you, a lot
of my net worth is tied
to the market. I
certainly have felt the
anxiety that everyone
else has been feeling,
but that anxiety has
been sliding from
negative anxiety to
positive in the last few
weeks.
We saw Warren Buffet
step in and make a
statement by making an
investment in Goldman
Sachs a firm that's
financial success is
very much dependent on
the economy and the
health of the stock
market (and to some
extent so is
my business). Did Mr.
Buffet successfully pick
the bottom of the
market, absolutely not,
as we saw yesterday when
the so called bail out
plan was struck down.
But Mr Buffet does not
look to pick the bottom;
he looks to make
intelligent investments.
Granted the terms he
negotiated were better
than any of us could
have ever negotiated,
but that aside, Mr
Buffet doesn't invest to
lose. If he did not have
faith in the future of
the US economy Goldman
Sachs is not a place he
would put his money.
The bail out plan was
voted down for now, but
it is something I think
will eventually be
passed. However, even
if it is not passed the
economy will carry on,
and undoubtedly, markets
will go higher. It just
may take a little longer
to get there.
Reading through this you
may say why am I so
optimistic. Aside from
the fact that I believe
this will pass and we
will carry on. Just as
we did with 9/11, just
as we did with the tech
wreck, just as we did
with the dozens of
seemingly catastrophic
events I have seen in my
time in the investment
business... almost 12
years.
My optimism stems from
what I have seen
immediately following
those times; everybody
has seen the charts
where if you miss the
ten best days of the
market in a given time
your returns are hugely
compromised.
Without doing any
research I can say
with almost
certainty the
majority of those
"best days" fall
soon on the heels of
events like those we
are experiencing
right now.
There are two very
important things for
you to know and
believe:
1) The economy will
carry on and will
prosper
2) As we watch
seemingly good
companies fail, the
fear around that is
causing all
companies good and
bad to see their
value unduly
compromised. This
creates opportunity
for the Fund
Managers that you
have selected to run
your investments. (ie.
Manulife, Fidelity,
Trimark etc.) I
suspect they are
busy selecting those
opportunities, just
like Mr. Buffet. It
doesn't take a money
manager to tell you
that you make the
most amount of money
when you are able to
buy things at a
discounted price. As
a financial advisor
I want to ensure my
clients that they
stay the course and
are able to benefit
from those companies
purchased at a
discount.
As I write this -
the TSX has
recovered 444.66
points, to
11,739.73. (around
1:30 pm EST)
The Toronto stocks
fell 840.93
points on Monday;
their biggest one
day drop to date.
The bounce back by
almost half today is
because seasoned
investors know good
buying opportunities
when they see them.
The optimistic view
is that what we're
seeing today is
smart buyers picking
up solid long-term
investments.
I know I cannot give
you assurance or
stop the markets
from going down, but
I can ensure my
clients that they
are there when the
market recovers.
I don't know when
the recovery will
be, but I do know it
will occur.
Please call me if
you would like to
talk to me. I'll
help as best I can.
Optimistically
yours,
Shari Molchan
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