Let me start this off with a simple statement.
I am NOT an expert in the field of economics, but have spent the past 20 years working with people who have real problems and want answers to their questions. The intent of this blog is to allow people to ask tough questions and get real answers. For me, the purpose is twofold - to help my clients and others make sense of "financial issues", and to allow me to provide some insights that people may not get from the mainstream media.
Over the past three months, the Canadian (and global) economy has undergone dramatic changes. It is worth noting that few if any of the problems were "eye openers", as many economists had foretold our current situation several years ago. Yet with the media's negative pessimism and failure to point out any positives, your average Canadian finds themselves lost and struggling to find answers. As we watched our retirement savings crumble (I hate that word), people wondered "should I sell" and accept the losses already incurred.
One thing history has taught us is that markets rise and markets fall, but they inevitably rise again. Trying to decide when to buy and sell is a difficult proposal for the experts - how can Joe Average expect to do that? Several years ago someone explained that stock markets work like a yo-yo on an "up" escalator. While the yo-yo will go up and down, the escalator eventually goes up. What we need to remember at this time is simple - right now is the time when smart people buy from dumb people. Warren Buffett, the richest man in the world, said it best in a recent NY Times article "be fearful when others are greedy, and be greedy when others are fearful". Now is not the time to sell, but the time to buy.
The next time you have a "finance" conversation with a friend, family member or co-worker, remember Warren's statement. Better yet - bookmark this Blog and see where the markets are in 10 years.