Topic: How To Invest

What is Pat’s commentary for the week of August 6, 2014

Article Excerpt

Some investors see last Thursday’s 300-plus point drop in the Dow Industrials as an omen of a more serious market downturn. They wonder if they should sell some of their stocks now, hold on to the cash for a few months, then buy the stocks back when they have obligingly come back down to lower prices. You can find plenty of support for this idea in the media. Mostly it revolves around the view that stock prices have gone up excessively, and are now too high. These assumptions rely on a highly selective view of history. For example, the Toronto exchange index has nearly doubled since March 2009, or about five and a half years. That is an unusually fast rise. But the market was at an exceptionally low level in March 2009. When you look at how the market has performed since a record-setting plunge, it always looks as if it has gone too high in an unusually short time. Go back…

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