• The (Canadian) markets as measured by the SP/TSX have been climbing since December 29th!  Is this a true turning point or just a bear market rally?

  • If is turns out the latter phenomenon is true than I cannot wait to buy more a valuable companies at new lows.
  • In order to maximize returns the ability to buy near or at a market bottom is vital.  If a stock such as MFC drops from say $40 to $20 this represents a 50% loss in value.  If one were to buy the shares of MFC at $20 and hold until they return to $40 they would achieve a 100% return in value.   Not accounting for dividends while waiting patiently for the value to increase, this ‘Buy Low and Sell High’ mantra holds true but the taboo of Market timing needs to be laid to rest.
  • One can choose to wait until definitive signs of a true market rally and miss out on a substantial portion of the gains (remember the widely touted returns of a handful of trading days over the years accounting for a major portion of the positive returns) or just jump in a buy on the dips.  Even better buy at new lows should they appear.  Many gurus are advising that investors wait until clear signs of a rally appear but I would rather invest Low.  Unless the global capitalist stance changes irrevocably,… buy on the next dip or new low.
  • Addendum: this quote from Seeking Alpha today: “Remind yourself of what both Buffett and Barton Biggs have pointed out, and what macroeconomic prognosticators often forget: a stock market bottom does not occur when terrible economic news turns into good news. It occurs when terrible news turns into less terrible news, which turns into bad news, which turns into OK news.”

  

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