Bay Street hits psychological high
Posted Feb 16, 2011 12:53 pm.
This article is more than 5 years old.
It’s another sign that the recession is over and investors are feeling more confident.
The TSX passed the 14,000 mark Wednesday morning.
ATB Senior Economist Todd Hirsch says while the number is mostly a psychological factor, we have to be impressed the equity market has almost reached 2008 levels.
“There is more psychology around it than anything,” Hirsch tells 660News. “Nonetheless, I think we have to be impressed that” (the) “equity market in Toronto has reached back up at that level. We’ve almost come back to the highs we saw before the crash back in 2008.”
He feels the fear over investing is over for now, but adds anything is a guess when it comes to the stock market and investor apprehension could always return.
“2008 isn’t that long ago,” Hirsch added. “It’s still fresh in people’s minds. And if they start to feel, ‘Oh no, it’s happening all over again,’ I think that herd mentality could lead to a big drop suddenly. Because sometimes what happens, the psychology around these numbers like 14,000, people may want to take some profits on that. So we might see some selling, and it’ll dip back down to maybe 13,600 or something like that.”
But with natural resource prices generally on the rise, Hirsch expects Bay Street to continue to post gains.
Hirsch notes that the rise in the markets is going to have a “wealth effect.” Investors are going to feel better about their financial situation, as opposed to the negativity mood the markets created in 2008.
