Buy Low Sell High

Your last chance to buy low

As I write this on April 29th, 2020, US markets have bounced back 31.38% over five weeks from their March 23rd lows.

For those of you who invested when markets were down 30%, well done. You have made a rapid 30%. If you hesitated or you still have some cash sitting on the sidelines, I am here to provide you with some good news. You may get one more opportunity to buy low before markets take off for good.

Let us look at the US market (S&P 500) and how it has recovered after the past two bear markets.

2001-2002 Recovery

2001 Recovery

*Data provided by Y-Charts

When markets hit rock bottom on October 9th, 2002, they quickly recovered 20% over six weeks, only to fall 14% shortly afterward. Having caught the bottom of this 14% correction, you would be up over 38% one year later and 66% three years later.

2008-2009 Recovery

*Data provided by Y-Charts

The financial crisis of 2008 came to an end on March 9th, 2009. Afterward, the S&P 500 jumped up 39% over eight weeks before giving 7% back. Having caught the bottom of the 7% pullback, you would be up 22% one year later and 52% three years later.

2020 Recovery

Just like the past two bear markets, we have had a very quick recovery, so I am expecting a correction soon. Looking back on history, this potential correction might be your last chance to buy low before markets start making their way back up for good.

Get ready with your cash on hand, and do not be afraid to buy aggressively. Worst comes to worst you get in a little too early and you miss the bottom. Do not be greedy and remember, even today, markets are not anywhere near their February 2020 highs, so you are still buying low with plenty of upside potential over the years.

See “The Stock Market is Down, Time to Buy?” for some motivation if you are still concerned with buying too soon.

My biggest tip: put a plan in place and do not wait until it “feels good” to invest. Trust me, it is never going to feel good investing when it looks like the world is ending, but that is the best time to be pulling the trigger.

Colin Sabourin is a Winnipeg-based investment & financial advisor with Harbourfront Wealth Management. His specialty is working with farmers who are planning to sell or transition their farms within the next 5 to 10 years. 

Disclaimer: The views expressed are those of Colin Sabourin, Certified Financial Planner, and Investment Advisor, and not necessarily those of Harbourfront Wealth Management Inc., a member of the Canadian Investor Protection Fund.