If you have been following this column you likely know that I have not been what would be referred to as a market bull for some time now, dating back in fact to before the credit crisis of 2008.
This is not to suggest that I don’t believe in investing, because I do. I just haven’t felt for a while that we are in the sort of secular bull market that existed throughout the 1980s and 1990, when you could fall asleep and wake up years later to find your investments worth much more than you would have ever dreamed possible.
Today we look around the world and it is hard to believe that things will improve. It is even harder to convince others that things will improve. As we all know, Europe is a mess. The U.S. is heavily in debt, and even China is showing signs of slowing down.
In Canada our housing market is slowing down, and with falling commodity prices many are concerned about our overall economy. The future does indeed look bleak.
In fact, in many ways it reminds of how things were when I graduated university in 1982. Interest rates were very high, peaking in 1981 at over 20 per cent. Unemployment was at its highest level in decades. Real estate had crashed, and the stock market was kind of like it is today — not seeming to be going anywhere.
I didn’t pay much attention to economic numbers back then, but I did understand the meaning of unemployment. Many of my friends who I went to university with were unemployed. In fact I was looking for my first job at a time when unemployment was its worst since the great depression. I was not a stock market investor at the time (since I had no money). But even if I did have money, I can’t imagine I would have wanted to invest it.
I imagine that like many today, investors at the time were disillusioned with the markets, which had basically gone sideways for quite a few years. I’m sure they weren’t very optimistic either, with the global economy in terrible shape.
The future did indeed look bleak.
Who would have guessed that it was the opportunity of a lifetime to invest?
I have to admit that for the first time in a while I am actually starting to feel optimistic. This is not to say that markets have necessarily bottomed out. Maybe they haven’t. But that doesn’t matter to me, because I have a plan.
Please feel free to call or email if you would like to know more. Also be sure to register for our upcoming presentation on the Psychology of Investing.
Jim Grant, CFP (Certified Financial Planner) is a Financial Advisor with Raymond James Ltd (RJL). This article is for information only. Securities are offered through Raymond James Ltd., member Canadian Investment Protection Fund. Insurance and estate planning offered through Raymond James Financial Planning Ltd., not member CIPF.
For more information feel free to call Jim at 250-594-1100, or email jim.grant@raymondjames.ca. and/or visit www.jimgrant.ca.