Happy Leap Day
“May you live in interesting times” a purported traditional Chinese curse is applicable to the market turmoil of these past days. As strange as it sounds, these are the times that I love as an advisor.
I started advising people in regards to how to manage their finances almost 25 years ago and I have seen many interesting times and times like these… times where we see rapid market declines due to real issues and legitimate concerns. If you have been investing long enough you will remember the 1990s stock bubble followed by the 2000 – 2002 dot com bubble bursting. You might remember the energy crisis of the early 2000s that led to an energy bubble here in Canada and then that bubble bursting. The housing bubble in the US and the Sub Prime Mortgage crisis that led to the markets devaluing dramatically. We’ve seen the Fukushima nuclear meltdown in Japan, we’ve seen 9/11, Iraq, Afghanistan, rampant terrorism across the Western world. We’ve seen SARS, MERS, Ebola and now we are onto the Coronavirus.
The interesting thing is how each of these felt like an existential threat. That things were different that time. But the one thing that was the same through all of those events was how important it was to not let our fear get in the way of our investment strategy. Holding through all of the above was the right thing to do, and in my opinion is the right thing to do now.
Here are some articles I wanted to share from my Saturday reading.
- Rob Carrick speaks more eloquently about what I said above. “Lessons from past market plunges …”
Lessons from past market plunges – and my single biggest regret in reacting to them
Some advice for investors seeking direction during the turbulence
Read in The Globe and Mail: https://apple.news/AkZ_jA4tnSX-citgcJg5zAg
- CBC writes about how banks around the world have cut interest rates in response to COVID-19. This puts more money into the system (another way money is ‘created’ or ‘printed’) More money in the system tends to lead to higher stock, bond and real estate prices.
Why coronavirus will force central bankers to give the economy a shot in the arm by cutting rates
Central bankers are waking up to dramatically overhauled expectations about interest rates, as the coronavirus that started in China and is now creeping around the world rewrites their plans as quickly as the virus spreads.
Read in CBC News: https://apple.news/ArCGFc2jZS-qTcc_Yt2IScA
- For a bit of optimism, this virus, that seems to be no deadlier than the flu, can help us to prepare for the next contagion. We couldn’t have a better demonstration of the holes in our global health response.
Why the Coronavirus Is a Black Swan Event We Might Actually Need
Read in Inc.: https://apple.news/A27DRq-_-RH2ug1NUo36xNQ
