Time to buy (even with the crisis)

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This topic isn’t new.  Warren Buffet mentionned that it was a very good time to buy on the stock market.

You will ask why, and even argue that your financial counsellor told you specifically not to do so.

Tell you what: if you are young, that could be a big, huge mistake.  Explanations: when the stock market is low, very low, you can expect, if you take time to choose carefully your investment, to make nice profits.  It’s very simple, and been proven through history.  Every crisis has been resolved, one day or another.

Despite what happened in 2008, the stock market has still generated annual returns of around 10% since the 1920s. But you’re more likely to achieve this historic return after the index fell 35% after an increase of 35%.

Again, it doesn’t mean to buy anything that fell off 35%!  A good strategy might be to invest (if you are Canadian) through your RRSP.  Most financial institutions offer to buy RRSP investments with some negociated funds exchanges.  A good example might be the iShares CDN S&P 500 Hedged, but there are several other options available.  You should talk with your financial institution to choose a product that will be a good asset according to what you already have.

As an example, I personnaly have the chance to make retirement savings with my company.  They are very conservatives and most likely to invest in safe sectors.  Wich means that with my personal RRSP that I negociate with my financial institutions, I can allow myself to go on more «risky» market.

And do not forget one last thing: if you are young (mid-30s and younger) you have to think long terms investments with your RRSP, somewhat like 20 years.  The current crisis will only be a far memory when you’ll get there.

Good luck!


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