What should you do when the markets are down?

and breathe

Gobble Gobble! It’s that time of the year again for our southern neighbours to celebrate Thanksgiving. In the US, Thanksgiving is more than just about being with family, eating turkey and giving thanks for all that they are fortunate to have – it is about football, parades and Black Friday shopping.

American thanksgiving is predictable – Thursday is football, Thursday night is the big family dinner and at midnight people head out to do their Black Friday shopping. We’ve seen it in the news, people will wait in huge lines to participate in the deep discounts that retailers offer. And in certain stores, they may temporarily forget any sense of social etiquette they once possessed. From this behaviour we can deduce that people understand the financial benefits of purchasing goods at a discount from their “regular” price.

If this is the case, then in my opinion, Black Friday came 2 months early. The Canadian stock market was down 11% from September 1 – October 15 and the MSCI All Country World Index (global market place) was down 9% over the same time period. Using the same logic, financial advisors, brokers and other financial institutions should have had a long line up of clients wishing to invest. When markets go down, it means there are great companies for sale at a discounted price.

Although, over the 45 day period net equity mutual fund inflows was positive ($9 billion into US equity mutual funds according to Morningstar – which means people were putting money into the market), historically, investors put more money into a rising market (buying companies at a premium) and take money out of falling market (sell companies at a discount).

Screen Shot 2014-12-04 at 12.56.48 PM

Related articles

Newsletter Images Articles

How Lower Interest Rates Affect Canadians

Canadians have been anticipating an interest rate decrease for the past six months. Why is the market so excited about an interest rate decrease? An ...
Read More →
Podcast Cover Podcasts

Episode 264: Top 10 Investment Mistakes

Welcome to another episode of Think Smart with TMFG, your go-to podcast for what’s newsworthy and relevant to everyday Canadians. Join Senior Financial Advisor Rob ...
Read More →
Newsletter Images Articles

Top 5 Tax-saving Tactics Every Gen-Xer Should Know

In this week’s article, we’re exploring five essential tax-saving strategies explicitly tailored for Gen Xers. Born between 1965 and 1980, Gen Xers are in their ...
Read More →

Financial Planning Advice from Canada's Top Financial Advisors

Sign Up To Receive Email Updates On The Financial Industry And Complimentary Workshops.

By providing your e-mail address you provide The McClelland Financial Group of Assante Capital Management Ltd. with your express consent to send you electronic communications. If you choose to discontinue receiving e-mails, you may withdraw consent by contacting tmfg@assante.com.

FREE RESOURCE

Get actionable financial insights from the Top financial planners in Toronto.

Toronto's Top Financial Advisors
Copyright Assante Wealth Management. © 2024

Disclaimer | Assante advisory services are offered through Assante Capital Management Ltd. Assante Capital Management Ltd. is a Member of the Canadian Investor Protection Fund and Investment Industry Regulatory Organization of Canada. The services described may not be applicable or available with respect to all clients. Services and products may be provided by an Assante advisor or through affiliated or non-affiliated third parties. Some services and products may not be available through all Assante advisors. Services may change without notice. Insurance products and services are provided through Assante Estate and Insurance Services Inc.

We have a team of advisors each specializing in varying portfolio sizes. Please let us know the approx. amount of your investable assets to help us to direct you to the advisor that is best suited to you.