Investment lore tells us that “there’s gold in them there hills”, when it comes to initial public offerings (IPOs) of stocks. Surely everyone has heard stories of those fortunate enough to “get in on the ground floor” of McDonalds, Microsoft, Tim Hortons, Apple, Dollarama, Amazon, etc. and the countless number of times those stocks have multiplied since then.
On August 4th, the Globe and Mail reported that just 17% of large-capitalization equity fund managers in Canada outperformed their benchmark in the second quarter, which proved to be the worst quarter for active managers in at least 17 years.
Market corrections are uncomfortable. Investors’ emotional responses are rooted in the worry that a catastrophe will occur. Our companies go bankrupt. Stock prices go down and STAY DOWN…or become worthless.
It seems that every time I look at the Business section of a newspaper or tune into a Business channel someone is asking whether we should “take some off the table”. This bugs me on a couple of levels.