Investment Market Predictions

Recently I was asked about what the markets will do in the next quarter.  My answer was, “I don’t know, and neither does anyone else.  If they did, they wouldn’t tell you, and they’d bet everything they have on it.”  It’s a hard truth.  We point to signals and say, “See, that signal means this will go up and that will go down, and then this will happen and then that.”   If anyone really knew that, they would be masters of the universe.  

Like the voyageurs and explorers of hundreds of years ago, good financial advisors really don’t know what’s over the next mountain, but we understand the principles of surviving and thriving in the environment.  It also strikes me I’d rather have a guide with lots of scars than one with soft, unblemished skin!

Market predictions tell you more about the person making them than the actual future. They are often a projection of personal biases.

Each day in the market is roughly a 50/50 toss-up on a gain or drop.   (A person does not “make” or “lose” money in the market until they actually sell.)  The stock market is remarkably similar to a casino in that every wager presents a winner and loser, and the casino wins and loses.  Given enough wagers, the casino wins because the odds for every game are in their favour. The casino owner thinks like this:  “To accept a customer wager is to speculate.  To accept many customers making many wagers is to invest.”

To be an investor is to understand the system of probabilities and that, over time, they are in our favour.  We don’t control the static/noise of daily fluctuations.  We do control our patience and behaviour.

As I write this on the morning of Friday, May 13th, the stock markets are up significantly, between 2% and 3% on the day.  It means nothing if you aren’t there, nobody could have predicted with any reliability this would happen.  But the day isn’t over yet….  

Is today the start of a turnaround?  Or is it a “dead cat bounce”, a spasm upwards in a general downward trend?  Nobody knows.

What we do know is that ultimately the markets are a price we place on the value of economic well-being.  As an optimist and a realist, I know that the road into the future is winding and bumpy, but it arcs towards a better and more valuable world, as it always has.  We’ll get through this turbulent market the same way we did in the past – with preparation and patience.

Alain

Tax Planning

Tax planning can be also complex and hard to understand, because everyone's situation is unique. Below, we look at different financial situations and how we'd suggest each person proceed to get the most favorable result.

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