Quote:
Originally Posted by CaptainYooh
The 2008 recession came in somewhat unexpected, like a stone wall popping up in front of a bullet train. March 2020 market drop was also hard to predict. Now, with a long 6-month recession almost at the door and almost universally expected, I wonder if selling all stocks held in RRSP portfolios would be a sensible and safe strategy? Downside would be missing on the market bottoming out and starting to gain sharply. Upside - peace of mind and relative safety/preservation of the principal ready to be deployed when things get better. My hesitation is caused by the high quality of stocks in my portfolio. But they are not immune. I've lost a lot of money on Fairfax and BNS in 2020, both very safe and solid, supposedly... Sounds like I've already made up my mind, but would like to hear others' talking.
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My professional opinion is that this would not be a sensible strategy. Nor a particularly safe one, ironically. And the reason I say that is that once you have made the market timing decision to exit the market, you will be emotionally invested in your decision, and will feel pressure to act again. And should the market move against you, you will find (if you are like most people) more and more pressure to act.
Market timing is extremely difficult at the best of times. Getting out of the market 10 or 11 months into a bear market, is only that much more challenging.