Thursday, February 25

How to take advantage of the stock market madness without getting carried away

Among those who have been interested in the stock market for more than six months, the question comes up more and more often: is it a bubble that we see there?

We all like to see your investments go crazy, but there comes a time when you scratch your head and say to yourself: “hmm, that’s too fun …”

The main index of the US Stock Exchange rose 16% in 2021, and more than 70% since the trough last spring. The US technology index, the Nasdaq, climbed 43% last year, and 88% since the March low.

We make a lot of tech, but madness has also seized the clean energy sector.

The exchange-traded fund (ETF) iShare Global Clean Energy (an index fund that mirrors the industry) saw its value jump from $ 8 to just over $ 28 at the end of last year, a rise of 250% in less than a year.

Tesla is a lot of talk with its jump of 750% in 2020. When we dig a little, we find many titles that have blazed from 100% to 1000% during the same period.

The Canadian stock market had less spectacular performance, but it rebounded 55% after hitting the abyss at the start of the pandemic.

Since January 1, we have seen nowhere signs of slowing down, on the contrary. It climbs, it climbs!

Tell me, is there anything more comforting these days than taking a look at your brokerage account balance?

The rush for the stock market

Apparently, many of them are looking for solace in the Stock Exchange. Last week, Desjardins Online Brokerage sent a message to its clients warning them of a slowdown in service due, in particular, to account openings in unusual numbers.

All brokerage firms are being taken by storm with new clients who don’t want to miss the train.

We can see signs of euphoria here and there. He quietly settles the belief that it is easy to make money. I see Tesla shareholders who think they are investment geniuses, Bitcoin holders who claim to have understood everything. And many people try to imitate them.

It’s not a good sign.

An opportunity to learn

I don’t want to dissuade anyone from taking a chance, but it would be a shame if your first experience kept you away from investing forever. Because a great opportunity to learn presents itself. For real.

If you are taking your first steps, do not bet everything on a few stocks or on a single sector. Don’t put too much money into it to get started, and don’t get carried away too quickly. Don’t wait too long to cash in your profits. Be careful.

For the rest, I leave you with these wise words from the great investor and billionaire Warren Buffett:

It is when the tide goes down that we see who bathes naked!

A book titled Online brokerage was published some time ago by Éditions du Journal. Stéphane Desjardins, who is a financial columnist at Newspaper, explains how you can learn to invest yourself.


For those who wish to invest in the stock market themselves, you must first learn the basics of online brokerage:

  • manage your emotions,
  • know your risk tolerance and your investor profile (value, growth, momentum, annoying),
  • understand the financial statements of companies to invest,
  • learn the basics of investment and finance (ratios, economic concepts),
  • identify the different types of investments (stocks, fixed income, mutual funds, ETFs, labor-sponsored funds).

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