George Vasic is the Equity Strategist and Chief Economist for UBS Securities Canada Inc. In this capacity he is responsible for the Canadian market and economic outlook, sector rotation and asset mix recommendations. He has consistently ranked in the top 5 in both the strategy and economics categories, has won several awards for forecast accuracy, is widely quoted in the media, and for five years was a contributing editor to Canadian Business magazine.
Obviously, Mr. Vasic made this rather bold statement due to his lack of knowledge, or because he wants the entire business community to percive him as having gone off the deep end. He woudn't actually say something like that because of a deep-seated belief that things are ripe for a quick turnaround now would he? More and more people "in the know" are pointing to a bottoming for the market, and if you would harken back to past blogs, you would see the date December 4, 2008 as a predicted market bottom from yours truly (courtesy of the work of very smart people). We will see how accurate these forecasts are over the coming weeks.
This now brings us to the point of this blog entry. Will you be a buyer of RRSP's during the annual "RRSP season"? It's like walking into a mall and the sign says "Everything 50% off". The only difference is this - we don't know when markets will rise and waiting to see may mean paying higher prices. In talking with clients over the past month or two, most of them have taken the approach to "stay the course" and continue doing what they have always done in the past.
The mole seems to know what you should do. Who or what is the mole you ask? He is a writer for CNN Money Magazine and in the this recent article, he certainly hits the nail on the head. He makes one very important point, "I ask about risk tolerance only to make the point that hypothetically losing half of your portfolio doesn't inspire the same fear that actually losing it will". Now before someone emails me or comments that they didn't know they had lost half of their money, that is nnot the case. However, I firmly believe that the recent market drop will help people better understand the importance of long term planning based on good sound judgement.