“The markets are overvalued, I want to go to cash! The markets are down, I want to go to cash before I lose it all!”, what a difference a few months bring. From wanting to cash out in mid-March before losing it all to wanting to cash out because the market has recovered “too much”. Where are we right now? Let’s look at some of the bullish and bearish reasons for optimism with relation to the markets:

Bearish (pessimistic view)

• Cases of COVID are rising at an exponential rate in the US
• There is potential for a second wave (if the first wave ever ends) in the fall
• There is a US election this fall with polarizing differences between the parties
• Widespread belief that many companies have become overvalued

Bullish (optimistic view)

• An incredible amount of stimulus has been approved in the US, Canada and around the world
• The potential for a vaccine and treatment options for COVID in the near future
• The economy has reopened in many places around the world
• The market as a whole has not recovered to February levels so there is still room to grow

So, which side wins the argument? It does not matter… What does matter is ensuring that you are properly invested for your long-term goals and have a proper mix of asset classes and styles that are diversified geographically. What you and your advisory team should be doing right now is reviewing your “Investment Plan” and re-balancing back to your target asset mix, ensuring you have a good diversification of styles (Growth/Value) and that you are not over invested in one area of the World (generally Canadians have too much CDN equity).

If the market does re-test the lows of March, then you will do it all again, rebalancing back to your target asset mix. By doing this over and over, it allows you to buy low and sell high. It sounds easy in practice but the emotions, especially at market lows can get in the way of rational thought. That is when you need an advisory team (such as The Hicks James Advisory Group) to be there to provide proper counsel to ensure you make the right decisions to maintain your wealth.

If you would like to chat, please do not hesitate to reach out – you can find more about our team, including contact info on our website www.thehicksjamesadvisorygroup.ca