U.S. Federal Reserve Board chairman Ben Bernanke needs to make some strong statements today to reassure the equity markets, according to a Vancouver wealth management adviser.
“There’s no doubt that they’re going to be trying to send out a positive message,” said Thane Stenner, director of wealth management at Stenner Investment Partners, an independent group within Richardson GMP Ltd. “They have to say something strong.”
Regardless of whether Bernanke reassures jittery investors, Stenner expects a choppy month.
When speaking with Business in Vancouver late in the afternoon on August 8, he repeatedly stressed that various North American equity markets have declined between 15% and 30% from recent highs.
“That’s presenting some pretty interesting opportunities,” he said.
He was buying stocks August 8 – a day that saw the Dow Jones Industrial Average plunge 634 points and the Toronto Stock Exchange fall 491 points.
Stenner said his clients have tended to be relatively conservative since February. Many had investments both in stocks, bonds and alternative investing vehicles, like ones where the investment is long for one stock or sector and short for another stock or sector.
Stenner had about 17% set aside in cash until recently. He expects most clients will be at about 5% cash within the next couple of weeks.
The Canadian dollar’s fall from above US$1.05 in the past month to barely above par yesterday may set it up for a short mini-rally, Stenner said.
In the next several months, however, he expects the U.S. dollar to rally.
The three options that greet investors, he said, is to either:
- run, hide and engage in panic selling;
- sit on their hands; or
- be proactive and pounce on opportunities.
Glen Korstrom
Twitter: GlenKorstrom