Fellow Fools,
A brief introduction: My name is Iain Butler and I was part of the crew that brought Motley Fool Canada to life 10 years ago.
Most of my time is spent researching stock ideas for our investing membership services, where we provide actionable advice on Canadian and U.S. stocks. (More on that in a bit.)
But I also get to step back and look at the big picture of what’s really happening in the North American stock markets – and think about ways investors can use that knowledge to grow their wealth.
With that, let’s get into what seems to be on the minds of most investors these days.
The ‘R Word’: What Is Even Happening?
Are we or aren’t we, will we or won’t we … these are the mental gymnastics everyone’s doing around the word “recession.”
So: Is Canada in a recession right now?
There’s not been an official declaration of this, to my knowledge. Even if there were, the official definition isn’t exactly precise.
So will we be in a recession in the future?
Definitely.
The economic cycle is real, and good times are always followed by less-good times, which act as a sort of reset for the good times to return again.
It’s Not All Bad
In terms of boots on the ground, I’m writing this message from the hills of Colorado where I’m visiting an old friend and enjoying the mountain life for the week.
The ski hills are packed.
The airports were packed (flew from Toronto to Denver).
The airplane was packed.
Restaurants and bars … you guessed it, packed.
Fellow Fools, if this is a recession, sign me up.
Putting my analyst hat on, I’m seeing much of the same when it comes to company earnings as fourth-quarter and year-end results are rolling in for the hundreds – literally – of companies that The Motley Fool follows for our membership services.
Broadly speaking about this vast collection, the numbers are good. In some respects – I’m looking at you Fairfax Financial (TSX: FFH) – really good.
What’s the Deal With the Stock Market?
What’s given the market pause, though (after a rocking good start to the year in January), is that the road directly in front of a lot of companies has fogged over. That is, their guidance hasn’t been as clear as most investors would like.
And here’s where our Foolish investing principles come into play.
(You might already be aware, but just in case, we take a long-term approach to investing here at The Motley Fool. To the point that we don’t suggest anyone have a single dollar of their hard-earned savings invested in the stock market that they might foreseeably need in the next five years.)
So with that long-term approach in mind, we tend not to care in the least about what the road directly ahead of us looks like. Foggy or clear.
Our aim isn’t to recommend companies that are going to “beat” earnings estimates in the quarter ahead, potentially resulting in a quick “pop” for the stock price.
Words like “beat” and “pop” aren’t in our Foolish vernacular.
Instead, we’re here to uncover and then showcase companies that are poised to outperform in the years ahead.
To be sure, we’ve had our share of swings-and-misses. So it goes in the investing world, where a success rate, represented by a positive return, occurs only 60% of the time … at best.
However, the wins that we have provided our members and the percentage returns attained have far outweighed the losses incurred.
And that, Fools, is part of the magic of the stock market. If you have a positive return of several hundred or even several thousand percentage points, it will tower over the inevitable double-digit losses that are an unavoidable part of the journey.
Underlying this magic is the most important ingredient of all: time.
Three-and-four digit percentage returns take years to materialize. And these returns are paramount when it comes to your investing success.
How to Make Money in the Market, Recession or Not
Think this sounds like an intriguing formula?
Then I’ll humbly suggest you take our flagship offering, Stock Advisor Canada, for a whirl. You’ll see this very formula in action because we track the performance of each of our stock recommendations. You’ll see plenty of three- and even four-digit positive returns that overpower the sprinkling of negative returns.
Which is why I’m not worried about whether Canada is in a recession … or whether the road directly ahead is foggy or clear.
Because if you’re armed with a patient mind-set and a collection of outstanding stocks, you WILL grow your wealth over time.
