We hope everyone has remained safe over the holidays and into this month. We have had a pretty interesting time with the emergence and spread of the Omicron variant.
We had quite a finish to the 2021 trading year and the markets were sitting at all-time highs. In previous letters we have discussed that at some point in time a correction was inevitable. During 2021 we have seen technology stocks rise to extreme valuations. It makes sense that the correction we are in started in the technology sector. This prolonged pressure in tech has seen some tech company’s halved in value the span of a few weeks. This selloff has gradually pulled the rest of the market down with it and we are now in the midst of a full market correction. The NASDAQ market is down over 14% from recent all-time highs to today (01/24/2022).
We have now seen the S&P 500 fall over 10% from recent all-time highs to today (01/24/2022) and is now in correction territory. We are very pleased with how our portfolios are holding up and we are certainly looking to take advantage of the situation.
Our Smart Income strategy uses companies with strong financials and pay a safe stable yield. These factors enable us to weather volatility in the market. This cash can be used to our advantage when the market dips. When the market corrects you are able to buy good companies at discounted prices. We will be analyzing the market as we go through this correction and use this to our advantage where we can.
In summary market corrections are a normal and necessary part of the market. Although they are not fun to experience they bring opportunities when they happen. It is important to push through these corrections confidently and income investments help us do that.
If you have any questions about your situation please reach out and we are happy to go over things with you.
Tchabushnig Wealth Group.
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.