Stock Market Update
The North American markets had another bad day today.
New York lost 2.2% and the TSX lost 1.28%. Our portfolios lost about 0.60% as our defensive posture continues to protect capital and provide cash to bargain hunt when appropriate.
Our cautious posture was motivated by the move to higher interest rates and tightening money supply.
Today, the official reason for the weakness is the fear of slower growth and the possibility of the beginning of a recession.
That is natural because of the withdrawal of stimulus is bound to slow economic growth.
As you know, we are expecting this correction to be quite severe and our inclination is to become even more risk-averse as we do not see much value yet. Valuation is the problem and the numerous forecasts of no serious slowdown are simply efforts to pacify investors, which puzzles me.
Falling markets are no fun, but we are prepared and the fun will start when the markets are coming out of the trough.
If you have friends relying upon their investments to maintain their retirement income, it is probably not too late for them to take the exit and protect their future.