Yup, we’ve officially hit the highest overnight funding rate in 16 years here in Canada. Our southern neighbours share a very similar story. Combine this with the geopolitical uncertainty occurring across the globe at the moment. We are in RISK OFF mode.

This has created a lot of fear and uncertainty in the market. These two emotions are the perfect kindling for the panic bonfire. It appears that nothing is spared from the sell-off we have experienced in recent weeks and months. Just take a look at the fear and greed index. At the time of writing, it is at a 24. At the depths of the pandemic, it was at a 6.

ULTIMATE FEAR

What industry loves to profit off fear? …. yes, you guessed it, the media! Every business channel has plastered phrases like the following across their tickers and headlines.

👉 Global recession 📉

👉 Bear market 📉

👉 Stock market crash 📉

👉 Interest rates rising 📈

👉 Inflation is soaring 📈

👉 The impending housing market implosion 📉

I’m not saying there isn’t some truth to these headlines but they often publicize the problem and offer little to no actionable steps or solutions. Fear sells.

I’m going to drop some knowledge bombs on you and allow you to stay somewhat calm and trust the data.

During these uncertain times, I often get questions like

1. Should I sell everything now and wait until the bottom and get back in? In theory, yes, but good luck trying to time the market (see below)

2. Why don’t I just wait until the market has hit rock bottom and then drop a lump sum into it? Haha, do you have a crystal ball, and were you able to time the following tops/ bottoms in the stock market? Nope, I didn’t think so.

Recent Bottoms:

S&P 500 bottomed Oct. 9, 2002, following a 2.5-year bear market

S&P 500 bottomed March 9, 2009, after declining 57%

S&P 500 bottomed March 23, 2020 after declining 35%

Recent Tops: 

S&P 500 topped March 31, 2000

S&P 500 topped Oct 12 2007

S&P 500 topped Feb 14, 2020

S&P 500 topped Nov 26 2021

3. What’s the point of dollar cost averaging if I know stocks are going to go down?

Let me show you what the data illustrates on why historical people who have had more time in the market have returned better performance than people who have tried to time the market

Time in the market beats market timing because it's like the tortoise winning the race - slow and steady. Here's why it tends to be superior:

1. Less Stress: Market timing can be a rollercoaster of emotions, but time in the market lets you chill. You're in it for the long haul, so you don't sweat the small ups and downs.

2. Money Magic: Time is your investment's best friend. The longer you're in, the more your money multiplies through the magic of compounding. It's like planting a money tree.

3. Save Cash: Frequent buying and selling can be expensive. With a long-term strategy, you save on transaction costs and taxes. More money for you!

4. Happy Investing: Market timing can be stressful, but a long-term approach lets you enjoy life without constantly checking stock prices. It's a happier, more relaxed way to invest.

So, embrace the slow and steady approach, and watch your money grow over time. It's like planting the seeds for a financial garden that'll bloom beautifully in the future. 🌱💰😊