Topic: How To Invest

What is Pat's commentary for the week of February 14, 2012?

Article Excerpt

Lately I’ve heard some investors wonder out loud if they have “missed the rally”—the 16% gain or “market rally” in the Toronto stock market since the lows of last October. They wonder if they should “take some money off the table,” and possibly wait and “buy back in on a dip.” These are the kinds of things people worry about if they focus too closely on recent stock price fluctuations or on long-term stock-market averages. Stock prices are volatile. A 16% gain in four months may seem enormous coming at the end of a weak year for the market like 2011. It may also seem extraordinary if you compare it to the 8% to 10% gains that the market produced on average over the past 80 years or so. However, gains of 16% or more take place in the market every year or two, on average, over long periods. Stock prices also exhibit a substantial random element. A 16% gain in any particular…

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