Given the headlines of the past few days I thought I would share some comments below from a small collection of experienced money managers; and add a couple of my own.
Fidelity Investments: Long-term bull markets never move in a straight line and it is normal to see short-term corrections along the way. Staying fully invested can give investors an opportunity to fully participate in the markets long-term upward trend. Waiting until the backdrop feels “safe” to make an investment in stocks, has historically not been a good method of achieving future returns. Many of the best periods to invest in stocks have been those environments that were among the most unnerving. We should be looking to corrections as buying opportunities.
Tye Bousada – Edgepoint: We’ve said this many times in the past, but on days like today (August 24th) it’s worth repeating: Volatility is the friend of the investor who knows the value of a business and the enemy of the investor who doesn’t. We continue to have cash to deploy should this downside volatility continue.
Eric Lascelles, Chief Economist, RBC Global Asset Management: Markets appear more likely to rise than fall from here, but timing bottoms is never easy and there are still multiple vying scenarios. At current valuations, this may be a good time for rebalancing portfolios, and it is starting to become an interesting time to explicitly shift allocations given less favourable bond valuations and more favourable equity valuations.
CIBC World Markets – By Benjamin Tal: A reasonable guess at this point is that this crisis might be short-lived, and for investors with more than a few months investment horizon, we might see some buying opportunities as markets overreacted.
Remember that your money managers are actively buying great companies at discounted prices on your behalf. Most had significant cash going into this correction and are in a good position to take advantage of this opportunity. It’s a great time for you to buy too. If you have excess cash to invest, now may be a good time to move it in. Give us a call to talk about it.