From it’s peak in September, the S&P 500 is in a 13% drawdown. The daily swings and volatility have been incredible to see and many businesses I follow are in a bear market.
In my TFSA, I had been selling Canadian businesses to counter my home-country bias and primarily focus on the US market. I successfully bought the February correction and felt good as the market slowly moved higher. Now as the market rolled over, I don’t feel panic, I’m counting down the days I can contribute to my TFSA next year. I’m excited to buy businesses at lower and lower prices.
But I am a little scared, I cannot lie.
I’m scared that when the market eventually moves higher, the businesses I own won’t move along with the market. What people want, and what I want (and I do not have) is negative correlation when the market falls and perfect correlation when the market rises. What i’m currently seeing (without the clear data – just from seeing my portfolio fall) is positive correlation as the market falls. So I see a businesses, Savaria for example – will it recover as it has in the past? or will depressed prices last for years? I have no clue.
It also just sucks to see a business I buy, Shopify, go up almost 30% in just over a month and to give it right back. As you can see from my Twitter feed, I should never have bragged. I may buy more a lot sooner than I expected.
I don’t worry about macro aspects that I have no control over. If this is a bear market, a correction, the start of something worse – it’s larger than I am and all I can do is ensure I hold great businesses.
Maybe I let dividends build in my account and don’t deploy them into the market.
Whatever happens in the short term, I do believe if you can expand your time horizon, this will be an opportunity. The market doesn’t end, and I continue to be optimistic about our future.
Do not interrupt compounding.