Corona Correction

In January we issued our 2020 outlook. You may recall in that piece that we were preparing for a modest market correction. Markets had gone straight up for over a year and a pullback was inevitable. The outbreak of the coronavirus has caused the scope of the correction to increase. But, I don’t believe that it has changed our strategy going forward.

Corrections caused by outbreaks of illness or national disasters cause a short term shock to the economy. When the crisis passes the effects typically reverse quickly. Pent up demand cause a rebound in the economy and the markets when the danger subsides.

Our bias towards investments that pay income shows its merit during times like these. The cash flow continues even though markets are down. In addition the correction gives us the opportunity to purchase investments when they are cheap. We can benefit well into the future by locking up income streams at attractive prices.

The violent nature of this correction leads me to believe that a buying opportunity is close. The best buying opportunities come to us when conditions are bad.

This communication has been prepared by Alan Tchabushnig and expresses the opinions of the authors and not necessarily those of Raymond James Ltd. (RJL). Statistics, factual data and other information are from sources RJL believes to be reliable but their accuracy cannot be guaranteed. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. It is intended for distribution only in those jurisdictions where RJL and the author are registered. Securities-related products and services are offered through Raymond James Ltd., member - Canadian Investor Protection Fund. Insurance products and services are offered through Raymond James Financial Planning Ltd., which is not a member - Canadian Investor Protection Fund.