Down Market

As we stay home to contain the spread of the Coronavirus, most of us are guilty of relying on Netflix for some cheap entertainment.

My wife recently started watching Grey’s Anatomy, so by association, I was now watching it as well. For those of you who haven’t seen it, the show follows a group of surgeons who deal with scenarios each more ridiculous than the next.

In many cases, the surgeon is forced to perform a procedure so difficult that there isn’t even the slightest room for an error.

When it comes to investing, we intuitively all know that we should buy low and sell high. As much as we’d all like to time the bottom of the market perfectly, we thankfully don’t need a surgeon’s precision to be successful.

So when should you buy?

It doesn’t really matter when you buy but rather that you do buy. The US market has gone through numerous bear markets over the years, and it has always recovered. So if you believe that we’ll eventually get through this pandemic, now is as good a time to buy than ever.

But I think markets will continue to drop, should I wait?

If you’re sitting on cash but are concerned that markets will continue to drop, then I would suggest breaking up your purchases.

For example, “I will split up my available cash into three tranches, I will buy when the market falls another 5%, 10%, and then 15%. If the market starts recovering right away, then I will buy once it increases by x% to ensure I don’t miss out completely on the way back up.”

I’ve seen it on many occasions where people think that markets will continue going down only to see the inevitable recovery. In that case, they miss out completely on their opportunity to buy in low because they kept waiting for the perfect moment to get in.

In times like these, it’s extremely important to have a strategy.

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Marc Sabourin is a Winnipeg based Financial Advisor and Retirement Specialist with Harbourfront Wealth Management. His specialty is working with pre-retirees and retirees who are looking for retirement, investment, & tax advice. 

Disclaimer: The views expressed are those of Marc Sabourin, Certified Financial Planner, and Investment Advisor and not necessarily those of Harbourfront Wealth Management Inc., member of the Canadian Investor Protection Fund