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Manic Market Movements:

Well it appears today that I didn’t buy enough on Friday.

After the US and International markets moved dramatically yesterday (us Canadians had our Thanksgiving Holiday) the markets are all moving higher again today.

What made me look brilliant on Friday for my buying binge could change tomorrow when I look equally foolish if stock prices decline once again. As an individual with professional experience working with acute mental illness I’ve termed this Bear Market as The Manic Market as it exhibits behaviour of someone who has manic depressive (bipolar) symptoms.

At the first glimpse of good news the markets are exhibiting exuberance and then crashing with dramatic fashion only to tick back up again at alarming speed. No investor can fault the market for this rebound as it was plainly obvious that stocks had over extended themselves to the downside. But I’ll caution investors at this moment.

This is a time to be prudent, cautious and conservative. Although I’ve been advocating investors take a serious look at the long-term opportunities this equity market presents you need to understand that momentum is short-lived and very volatile. What you see today could change tomorrow as fear & emotion take over once again.

Being invested in these markets will continue to test you and how to meet those tests will shape the type of investor you may become. When I look at high quality blue chip dividend stocks moving in positive and negative directions at double digits percentages I know that the market is showing clear signs of a manic personality. That creates value, but it can also destroy it just as easily.

Stick to your plan and regardless of the day-to-day movements we see I think you’ll benefit from the discipline of doing what you do best.

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{ 2 comments… add one }
  • NFtoBC October 14, 2008, 10:41 pm

    nurseb911 said: “Well it appears today that I didn’t buy enough on Friday.”

    And I purchased on Thursday morning. 🙁 Hopefully it will soon return to those heady values of last week.

    DAvid

  • Nurse B, 911 October 15, 2008, 8:44 am

    It was more a poke at humour than a serious comment. I don’t know if we’ve seen the market lows or not, but I anticipate the trend of many stocks hitting new 52-week lows will continue at a steady pace. Opportunities abound, but you need to do your homework.

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