[LINK] It goes up and down

[rfmcdonald]

It has been a stressful few days at the Toronto Stock Exchange. See The Toronto Star for typical coverage.

The Toronto Stock Exchange's S&P/TSX composite index plunged 604.99 points, or 4.75 per cent, to close at 12,132.13. Stocks on the exchange lost about $90 billion in value in the biggest point drop since the tech bubble burst nearly seven years ago. And yesterday's sell-off was on top of a 7 per cent drop last week that already had wiped out all of the gains made on the Toronto market last year.

Since Canada's dominant market hit a high in late October, shares on the TSX have lost more than $300 billion, or 17 per cent, hurting nearly every Canadian who holds shares, either directly or in mutual funds or pension plans.

"If you have money in a portfolio and don't need it for a period of time, then you're not affected," Allan Kalin, a financial planner with Polson Bourbonniere Financial Planning Associates in Markham, told the Star's Paola Loriggio. "But if you're 70 and you need that money for your retirement, then that's definitely not a pleasant experience."

Many more could be hurt in the long run, he added. "If companies can't get capital – and that seems to be one of the issues – then jobs could be lost over this."

"The sentiment is just phenomenally negative out there," said Craig Wright, chief economist at RBC Financial Group. "We're looking at a very sluggish U.S. economy. ... Everyone is willing to jump on any negative news, while anything positive is being ignored."

The fact that this morning the TSX has recovered two-thirds of yesterday's losses speaks as much to the extreme volatility of the Canadian markets as to anything else, like reasonably strong economic fundamentals.