There is currently a lot of conflicting opinions in regards to where global stock markets are headed over the next few months. On the one hand, we have the perpetual bears that strongly believe that the market is ripe for a sharp sell-off. David Rosenberg, the former Chief Economist art Merrill Lynch, for example, is adamant that the market will re-test their March lows. Others, however, believe that the worst is behind us and there is nothing but blue skies ahead. These conflicting views are causing retail investors a lot of confusion. My advice is to wait and be patient.

In my opinion, markets around the world have rallied far too quickly given where we are in the current economic cycle. History has shown that markets typically overshoot their fundamentals as news of an improved economy begins to emerge. I think this is what is happening now.

As the realities of the economic condition set in, stock markets will likely retreat in the coming summer months. It is during this period that investors should be diligent in patiently looking at the economic landscape and carefully picking their entry points into sectors that look most promising going forward. Patience often yields the best results when investing in stocks during uncertain times because it allows investors to make informed decisions with the help of their financial advisors rather than simply buying stocks because they have risen dramatically. I have always been a proponent of buying on weakness and selling into strength. If, for one reason or another, you missed buying on weakness then the best strategy t is to wait once again for the markets to weaken.

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