This may not be the time to permanently exit the market.

I'm writing this for my niece. Why? Her married daughter and her husband saw their investment shrink by about $5,500 and they got out. Was their move wise? The short answer: I don't know.

Purple line with dots is my portfolio. Cash holds its value in crashing market.

You see, I got out of the market. I had lost a chunk, I looked at the coming coronavirus tsunami and the simmering petroleum war between OPEC and Russia and I cashed in my chips.

Within days the market was in full correction mode and racing for bear territory. If I had stayed fully invested I would be down in the six digits. Some of my junior oil holdings would have lost 90% of their pre crash value.

Maybe I should have held onto my cash, waiting for the dust to settle but I'm a firm believer in the "you can't time the market" idiom. After a good solid drop, I put half my money back in the market. When the market was deep into a bear-driven frenzy,  I put almost all my remaining money back into the market. Then, I sat back and watched the value of my portfolio shrink.

But bear markets do not just drop. They bounce. And each time the market bounces it often returns almost to its previous highs. Hence, the advice: "Buy on the dips and sell on the rallies." This can work but more often than not buying on the dips, buying quality, and holding patiently is an even better rule to follow. It may take years, but it will come back. Patience.

How is it working out for me? Look at the following graph and you tell me.

The purple dotted line is my portfolio. The blue dashed line is the Canadian market and the red dotted line is the U.S. one.

Let me leave you with this thought: COVID-19 is a virus. It is here and quickly becoming endemic. It is of most concern to seniors and those with certain pre-existing medical conditions. The curve will flatten but not return to zero. Until a vaccine is available, there will be an ongoing background noise of a small amount of illness and, sadly, death (of mostly seniors). There is no easy exit ramp in sight. The economy will bump along for a year or more. Don't bet on a quick fix as folk like Donald Trump are promising. They are talking pipe dreams!