That Was the Week That Was!!

[Belguy]

Well, that was a fun week on the markets!! About the best positive spin that you can put on it is that it moved us closer to a good buying opportunity as just about everything just got cheaper.

This week's losses:

TSX: -2.30%
Dow: -3.29%
Nasdaq: -5.02%

Maybe this is the equivalent of a summer clearance sale for stocks.

However, just like many of those sales, there may be more discounts to come for those who are patient.

You've got to love the stock markets where you can lose more in a single week than you can make in an entire year with GIC's!!

Oh well, no additional losses for the next two days at least.

But, then comes Monday and the fun resumes all over again.

Gotta love it!!!

[the-royal-mail]

This is ridiculous. Looks like 1-2% GICs are not so bad after all. Can't be any worse than what I've made in the past 10 years. Stupid stock market.

</knee-jerk reaction>

[Cal]

Seriously, It was one week. There will be other weeks that are worse, and others that are better.

Don't sweat the small stuff....

[Belguy]

OK then, instead of concentrating on one single week, let's look at the year so far and see how the indexes have done.

Oh, oh!!!!!

With about 4 1/2 months left in the year, the S&P/TSX Composite Index is DOWN 1.85%!

Well, maybe the S&P 500 Index has done better.

Oh, oh!!!!!

It's performed even worse and is DOWN 3.21% so far this year.

Are we in for negative returns on the indexes at year's end?

Well, there is certainly much anxiety and negativity currently being expressed out there!!

Oh well, as we say about the Maple Leafs, maybe NEXT year!!!

[w0nger]

i think it's just a great buying opportunity... i'm doing regular deposits into index funds and the dollar cost averaging is working out great... then again, i'm optimistic about the future (ie. 3-5 years)

[kcowan]

How long do you think the stock market can stay decoupled from the real world?

Shouldn't it reflect the real increases in earnings from its components?

[osc]

The stock market reflects the anxiety over the future of US economy which is not certain at this point despite the good earnings. The earnings reflect the bull market of last year which obviously correctly anticipated the earnings of this year.

[dogcom]

Osc is correct and the market is also living off the sugar high of government stimulus which is now ending unless they pump it back in again in a big way. The market also isn't setting up very well at this time which means we could be into some difficulty this September and October.

I am thinking a bad September and October will be the backdrop needed for the Fed and the government to sell the next round of stimulus and quantitative easing.

[boycapitalist]

@ Belguy and the-royal-mail

"In the long run, a portfolio of well chosen stocks and/or equity mutual funds will always outperform a portfolio of bonds or a money-market account."
-Peter Lynch

While we can't predict the future, nor can we use past returns to predict those of the future, I'm willing to trust Mr. Lynch on this one.

[Belguy]

I'd suggest the "well chosen stocks" recommendation over the equity mutual fund option!!!