Given your long experience working with some giants like Sprott and running funds, given the current market conditions, do you think Fund managers will sell and lock in their profits for year end performance figures or buy into weaknesses for a better performance figure next few quarters? Won't their buying and selling behavior affect the volatility?
From whatever I read, it seems that year end performance bonuses are important for many in the industry!!
I am not asking to "time the market" but to withdraw money from my Registered account for living expenses:)
Year end bonuses are VERY important to managers. While some have moved to three or five-year rolling performance numbers, calendar year numbers remain a focus for most. If, as a manager, I was up 25% and the market was up 18%, I would absolutely try and get more conservative in the last six weeks of the year. Investors don't really care if you beat the market by 8% or 6%, but focus intently if you don't beat it. So the industry can be skewed a bit. But, on the other hand, there are managers who are 1% below the market performance and these have an incentive to spend money (roll the dice!) to try and catch up in the last six weeks. We have seen this countless times, and have done it occasionally. Thus, heightened volatility is often the result of this activity. So far, we are of the view that the recent market weakness is a 'normal' correction. We won't know for sure, of course, without more time passing. But nothing has really changed in the last month in terms of fundamentals.