How To Handle The Current Market Pull-Back?
After a very comforting run up in values post covid March 2020, it’s been a tough start to the year that has left the American S&P 500 stock index (“S&P 500”) now in official bear market territory. Our home-based Toronto Stock Exchange (“TSX”) has followed a similar path for the first time since November 2020. The question many investors are asking is: When might the market pullback run its course? Since hitting an all-time high on the first trading day of the year, major indexes have been in a steady downtrend. We now find ourselves dealing with lingering inflationary pressures, monetary-policy tightening, heightened sovereign debt and heightened geopolitical risks. However, does this really matter to the long-term equity investor? It should not. Every client household mandate features a mix of fixed income and equity investments to varying degrees based on personal criteria. Those who appreciate equity investing can provide great benefits yet requires a long-term time horizon, will see the current situation as we do; an opportunity to invest and buy additional highly coveted securities “at sale prices”. For our part, we will actively manage as best we can within our mandate to take advantage of the situation as it progresses.
