Opinion | The stock market is plunging. What should you do to protect your investments?

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Opinion: It’s a common bear-market practice to quit the market, other investors double down by ‘buying on dips’ and then there’s the sensible option of staying the course, writes David Olive.

The so-called “headline” news has been alarming. U.S. stocks were reported last week to have gotten off to their poorest first half start in 50 years, falling by about 21 per cent since the beginning of the year.

And Canadian house price increases have finally been curbed, conspicuously in Toronto, where prices are down as much as 20 per cent. Other investors double down on the market by hastily “buying on dips.” They take a chance on stocks that have dropped in price but are still overvalued. It’s worth noting that the current bear market follows a long bull market driven by almost freakishly low interest rates by historic standards.But the central banks will eventually curtail their interest rate hikes and begin lowering rates once they are confident that “price stability” has been achieved.

Canada’s Big Six banks, for instance, are down almost 12 per cent as a group from their peak early this year.

 

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Always sensible- that’s David Olive. Glad he’s with The Star!

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