OPPORTUNITIES

Have you been keeping track of the world economy lately? The last week was a bad one as fears about oil and the state of China’s economy led to ripples across the globe, of course including Wall Street in the US. Stocks across North America dropped in price sharply and unfortunately, Electronic Arts was not immune to that. In one week, the stock slipped from about $74 to $65, which meant my cache of EA stock was worth about $4K CDN less. Of course none of this was because of the company’s performance. When bad global economic news happens, everyone gets caught in the slide, even companies that are doing well.

Of course, I could dwell on the bad side of these developments but I’ve learned major slides like this represent a fantastic opportunity to buy stocks and funds while the price is low(er). As an experiment in 2008 or so, I bought $1500 in two funds each. This happened around the worst parts of the last recession. I had a feeling this wasn’t really the end of civilization and there would be a time, maybe years and not months, down the road where the economy would recover. To my surprise, I was correct. The $1500 in each fund I put in turned into about $3500 for both. It varies from month to month but my return on those investments are at around 130%.

Now in the grand scheme of things, the $3000 I put into the experiment won’t allow me to retire but it did teach me something. Buying low and selling high is really something that works. Now it appears the blood-letting isn’t exactly over so there’s some luck involved in timing your purchases right. Who knows, maybe I’ll buy more EA stock on my own or invest in more index funds. The worse things get, the more opportunity I see!

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