Tuesday, August 10, 2010

These are the summer doldrums

Everything is relatively quiet at the investment front. The quarterly economic data are so-so, while the corporate earnings reports are better than expected. A lot of the summer economic 'malaise' is due to the absence of many investors. Who wants to be driven nuts by the daily gyrations of the stock market numbers or pundit opinions while the sun is shining during the short summer?  Who wants to buy a house, rather than hanging out with the kids on a beach or in a camp ground?

So, if you cleaned up your portfolio earlier on and are waiting for September and October to pass, maybe the best thing you can do is park your money in a short term corporate bond ETF such as XSB in Canada using a discount broker (because otherwise the commissions are too high to justify it). While you are collecting interest and waiting for the investment fog of September and October (usually poor stock market months) to clear you may even enjoy a value uptick if the market heads south.

Then when ready in November, it may be time to use all these cash and short term investments to buy something longer term. So 'wait and see' is the motto. Yes it is not easy to be patient - I see opportunities every day and it is tough to say to yourself: "Wait, wait,... steady as she goes..." But that is how we navigate the shoals and cliffs of today's turbid and treacherous investment waters.

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