As markets continued to roil this week, industry experts offered some optimistic long-term perspective in online commentary.
Greg Taylor, chief investment officer at Purpose Investments, reminded investors that crises prove to be great opportunities to add quality investments.
“Taking a long-term approach is important,” Taylor wrote on Thursday. While that approach can feel “incredibly counterintuitive” during a crisis, “seizing the opportunity [to add quality investments] is crucial when the goal, in its simplest terms, is to buy low and sell high.”
He provided a list of market rebounds after various crises. During the Asian flu crisis in 1998, for example, the S&P/TSX Composite dropped more than 30% yet was up almost 34% one year later.
When it’s time to buy, Taylor said investors should assess companies based on whether their long-term business prospects have been permanently impaired or will be back to normal in a few months.
For retirees, he said it’s important to find income sources and position accordingly.
That’s a challenge as interest rates plummet. In audio commentary, Mark Wisniewski, a partner and senior portfolio manager at Ninepoint Partners, said generating income would require corporate credit.
“Rates are going to be low for a long time,” he said, citing central bank interest rate cuts and quantitative easing. When the forthcoming recession recedes, “corporate credit is going to be a great place to be,” he said.
He’ll be looking for “big bargains” in credit when business is back to usual — though that’s a waiting game, he said.
In a blog post on Thursday, Greg Valliere, chief U.S. policy strategist at AGF Investments, said investors are focused on the buying opportunity ahead.
“What we clearly detected [on Wednesday] when talking with investors is that a market bottom is within reach — and everyone has a wish list of cheap stocks to buy when the bargain hunting begins,” Valliere wrote.
He was positive about central bank action and federal spending packages.
“Monetary and fiscal policy definitely will ‘go big’ as the government mobilizes with a massive response, unlike anything since the 1930s,” he said.
For full details, read the the AGF blog post and Purpose Investments commentary, and listen to the audio commentary from Ninepoint Partners.