The Toronto Stock Exchange (TSX) hit a record high a little more than two weeks ago. Now, the TSX and most of the markets around the world are experiencing something else entirely as the coronavirus outbreak continues to spur painful selloff. The Financial Post recently spoke with Sightline Wealth Management Senior Vice President and Financial Advisor Paul de Sousa to discuss the matter. According to de Sousa, while the selloff is unsettling, it also is not that surprising.
“I think the markets are overvalued and they were almost looking for a reason to sell off,” said de Sousa. “It’s human nature to try to squeeze every drop of returns out of the fruit and I think they’ve been dealt quite a swift blow.”
While investors are still unsure how far the coronavirus will spread and how its expansion may affect businesses, de Sousa told the publication that any continued downturn by the markets will depend on “how many more cases are recorded and how many more countries it spreads to.”
De Sousa said that long-term-minded investors who are hoping to buy into the current market can do so but should only use one-third of their intended final position at a time. That way, they could possibly average out to the downside if the losses continue.
“I think the worst is yet to come,” he explained. “To think of this as a bottom is probably wishful thinking.”
Click here to read the entire Financial Post article.
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