Is the Stock Market Rally Over?

A couple of years ago, I had to close out all of my stock/investment positions to become highly liquid. I was buying some real estate (with plans to sell some shortly after), and so I figured my life would be easier being in all cash for that time. Easier to get the down payment for the new purchase and avoid the whims of the stock market at a time when I needed a mortgage. So in October, November, and December of 2021, I cashed out completely. I owned no stocks or other investments.

This blog has been documenting the process of getting “back in” to the stock market from my complete exit.

The first thing I did was invest the money in my RRSP properly. I took what was about 12% of my investment account and divided it up into some mutual funds with the bank. Since it’s in an RRSP, that might as well be fully invested at all times. It’ll be a decade or so before I can/will withdraw any of that.

Unbelievably, the S&P 500 is actually higher today than it was in May 2022. Although it’s close.

One of the first individual stocks that I bought was Manulife (MFC). I have bought it a few more times since then, but I am currently up 21% on the entire thing, including reinvested dividends. I’m happy about that, obviously.

I also maintain a strong position in Pizza Pizza (PZA). That is up 16% from where I bought it, including reinvested dividends.

Still in the life insurance space, my investment in GreatWest Life (GWO) has returned me 16.9%, including reinvested dividends.

Last year I invested in closed-end funds for the first time, particularly in the bond space. I own Invesco Senior Income – VVR, PIMCO Dynamic Income Fund – PDI, PIMCO High Income – PHK to start. Those three have returned me an average of 5% since I bought them, including dividends.

I don’t think the bear stock market is over.

We’re still in this optimistic phase. People hope for the Fed to stop raising interest rates. The Fed might still have a raise interest rates a few more times.

The Bank of Canada said it would pause raising interest rates to see the effect on the economy. They might have to resume raising interest rates in the fall of 2023.

I am SO tempted to sell everything. I’m up. I’ve survived a roller coaster of the last year and am sitting at a profit. I should take my money off the table again and wait.

But I am not a trader. I am not good at predicting the stock market, but I am lucky. I have a feeling that the second half of 2023 will not be as good as the first couple of months has been so far.

I wish I could trade on that. Bet on that. But I don’t want to sell all my positions.