Personally, in my investing career, I’ve never seen valuations this high. The extreme levels of greed and exuberance in the stock market today is driving stock prices to new all-time highs on what seems like a weekly basis. All this is happening while a global pandemic rages on and the tally of lives lost accelerates weekly.
That said, investing too heavily in the pricey growth names could be catastrophic if we do indeed see a massive correction. We haven’t see a meaningful correction since the pandemic-driven lows we saw last March.
If you’re an investor worried about the potential for an even worse dip, given where economic fundamentals are right now compared to overall corporate performance in Canada and the U.S., tilting one’s portfolio toward defensive companies and taking a lower return today could pay off over the next few years.