Is Now the Time to Take Extra Portfolio Risk?

Investors looking for out-sized returns in recent years have been rewarded for taking extra risk in sectors such as cannabis or cryptocurrencies, with valuations supported by sentiment which can only be defined as "extremely bullish," given the risk profile of such investments combined with the outrageous multiples investors have assigned to such companies at this point in time.

With risk-seeking behaviour generally being rewarded of late, the temptation to jump in feet first into investments with the potential to garner double-digit returns in a short amount of time can indeed appear to be warranted.

That said, when cooler heads prevail and market multiples decline to reasonable levels, the reality remains that sectors which may be priced today in an overly exuberant (or perhaps even irrational) way are likely to see the largest declines, leading to many investors (including myself) to warrant caution in this bull market.

I believe that attempting to time any market is an impossible task and that leaving money on the sidelines and failing to invest can indeed be a costly mistake over long periods of time.

That being said, I also subscribe to the concept of prudent fundamental long-term value investing; at current levels, the valuation multiples most North American stocks are trading at are simply too expensive for someone like myself to consider.

That being said, pockets of value can certainly be identified in this market in some sub-sectors of the energy market which have become appealing at this point in time.

Invest wisely, my friends.