Market Commentary – Will History Repeat Itself?

Curtis HaighBlog

Market Commentary – will history repeat itself?


It was 2007, the United States housing market was at an all-time high; and interest on those homes rates were at an all-time-low. The stock market was on fire, reaching new highs on a daily basis. Unemployment was at historical lows, you could buy a home with little to no income, and when you needed more money you could just borrow against the value of your new house. After all, houses always keep going up in value, right? Everything seemed like it could go on forever…and then the market crashed.

While this was the beginning of the great recession, and arguably one of the largest market corrections in U.S. history, how quickly we forget that the markets did the same thing after the terrorist attacks in September 2001, and the dot-com bubble in 2000, and let’s not forget black Monday in October 1987.

The fact of the matter is all markets, whether they are global stock markets, commodity markets, or single family homes are cyclical. Technically, we see some form of a market ‘correction’ every 7-10 years. Fast forward to 2014. The US and Canadian stock markets are at record highs again. Economists would need a crystal ball in order to determine exactly when we are due for another correction, whether that be 2 months or 2 years, however if history repeats itself – and it will – we will see another market correction.

The question then is what can you do to protect yourself? While “investing for the long term” is always the right mindset when it comes to planning for your retirement, there are certain steps you can take to ‘bulletproof’ your portfolio. You need an experienced financial advisor on your side to decide whether it’s the right time to readjust your portfolio and analyze your investment structure. You may have too much exposure to the Canadian or US Stock market (or, not enough). The opportunity to reduce exposure to public bonds and adding private equities to your portfolio is a perfect way to ‘crystallize’ some of the recent gains in the markets and also create a defensive portfolio in the process.

If you have bank mutual funds, a pension plan, or funds through an advisor or financial institution it’s important you analyze what types of fee’s are being charged for your professional management. One of the best ways to bulletproof your portfolio is to find ways to reduce and eliminate fees, which will result in higher returns.


Proper diversification is always the best way to ensure your portfolio is prepared for a market correction. Updating your risk tolerance profile with the help of an experienced, licensed, independent, TRUSTED Advisor will help insure your portfolio can withstand the next market correction. Precision Financial has you covered.