The market seems to have settled down a little over the last couple of weeks. Needless to say, I am not convinced that we are out of the woods. In fact, I expect the volatility to increase in the coming months. Does this mean that we are going go through the recent stock market bottom? Probably not. But we will likely re-test the lows. The reason why I don’t think the indices will break through the recent lows is that there is a tremendous amount of bad news already built into stock prices. Investors are expecting the absolute worst in terms of a recession. With this said, when is the right time to buy? I would argue that the safest strategy would be to see whether or not the major indices breach their recent lows. If they do, investors should simply wait patiently and see how low the indices go. If they bounce off their recent lows without breaking these lows then it makes sense to start accumulating some positions in some high quality names in the financial services, oil & gas, base metals and industrial sectors.

Mounir R. El-Ayari, CIM, FCSI, C.h. P. Strategic Wealth
Investment Advisor
Associate Portfolio Manager
e-mail: mounir.el-ayari@nbf.ca